President Joe Biden and House Speaker Kevin McCarthy struck a preliminary agreement on the debt ceiling over the weekend, dubbed the "Fiscal Responsibility Act," which suspends the debt limit until 2025 and limits discretionary spending for the next two years.

Negotiating teams from the White House and the Republican Party are currently completing the legislative text, which must be accepted by both houses of Congress in order to be adopted.

Since the Biden-McCarthy agreement was announced, the default-sensitive 1-month T-Bill yield has dropped over 40 basis points to 5.3%, indicating investors' confidence that the debt ceiling package would pass. Short-term U.S. T-Bills are tracked by the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:BIL).

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Here are the critical stages and votes involving the debt limit agreement that must take place in the coming days to avoid a U.S. default on June 5:

1) Clearing The House Rules Committee

The House Rules Committee, which is set to make a decision on Tuesday at 3 p.m. ET, is the first barrier before the debt-ceiling vote moves to the House floor. 

It is unusual for the minority party to assist the majority party's initiatives in the Rules Committee.

“We should kill this. We should move forward. We should pass a short-term debt ceiling change…let's do it right, let's not lift the debt $4 trillion,” Roy told Fox News on Monday. 

Goldman Sachs' analyst Alec Phillips believes the Rules Committee will be able to move the measure to the House Floor because a majority of the committee will vote in favor of the package.

2) Vote In The House

If the text regarding the debt ceiling is approved by the Rules Committee, the House can proceed to a vote on it the following day, June 1.

Both Biden and McCarthy expressed confidence in the House backing the bill, although some congressional Republicans, including Rep. Matt Rosendale (R-MT), have already expressed their intention to vote no. Still, a large majority of Congress seems to be on board, as Goldman Sachs believes "a failed vote in the House is very unlikely." 

3) Vote In The Senate

After being approved by the House, the bill will go to the Senate, which is controlled by Democrats. Here, the obstacles involve time constraints. 

Senator Majority Leader Chuck Schumer (D-NY) advised senators on Sunday that "due to the time it may take to process the legislation in the Senate without cooperation, Senators should prepare for potential Friday and weekend votes."

Once the Senate has voted on the plan, the debt-ceiling measure will go to President Joe Biden for his signature.

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