What happens next in the US debt crisis?

US President Joe Biden talks to reporters before boarding Marine One on the South Lawn of the White House in Washington on Friday, May 26, 2023, as he heads to Camp David (Susan Walsh/AP/PA)

After weeks of negotiations, US President Joe Biden and House Speaker Kevin McCarthy have announced an “agreement in principle” to raise the nation’s debt ceiling and avoid a potentially catastrophic default.

The agreement includes spending cuts demanded by Republicans, but it is short of the reductions in the sweeping legislation passed by the Republican-led House last month.