Pres. Biden and Speaker McCarthy reopened talks Tue. to raise the debt ceiling before a historic default on June 1.

What's happening? The U.S. government is set to run out of funds on June 1 if Congress fails to raise the debt ceiling.

What is the debt ceiling? It's a limit on the amount of money the federal government can borrow to pay its bills. (NPR)

Why does the US need to borrow money? TL;DR: the federal government spends more than it earns in tax revenue. (WaPo)

Therefore, the US needs to borrow money to fund programs such as Social Security, and meet the payroll for troops. (NYT)

Since it was first imposed by Congress in 1917, the debt limit has been raised 78 times. The current limit: $31.4T. (NPR)

What happens if Congress doesn't raise the debt ceiling this year? The US would default on its debts—a historic first.

Treasury Sec. Janet Yellen warned in a letter to Congress Mon. that a default would cause "severe harm" to Americans. (UT)

So, what's the deal? Well, Congress is at an impasse over spending cuts tied to a House-passed GOP debt ceiling bill.

House Republicans' bill would raise the debt ceiling by $1.5T in exchange for $130B in spending cuts. (WP)

What's in the bill? (WP) •Repeal of $80B in IRS funding •New work requirements for poverty programs

•Repeal of Biden's student debt forgiveness program •Repeal of $100B+ in unspent COVID aid

McCarthy told reporters Tue. that work requirements for poverty programs would be nonnegotiable in any deal. (NYT)

House Republicans' bill would require those under the poverty line to work 20 hours a week to receive benefits. (NYT)

What programs would be affected? (NYT) •Medicaid •SNAP (food stamps) •Temporary Assistance for Needy Families

Democrats have balked at the House GOP's work requirements: Biden called the proposal "unacceptable." (NYT)

So, what is on the table? According to Reuters, Democrats could concede energy permitting reform in a future deal.

Talks are ongoing: McCarthy told reporters Tue. that a deal could be reached by the end of the week.

But, if all else fails, Biden could invoke a clause in the 14th Amendment to issue new debt to pay bondholders. (NYT)