USA: the White House and the Republicans reached an agreement in principle to raise the debt ceiling

USA: the White House and the Republicans reached an agreement in principle to raise the debt ceiling (REUTERS)

The White House confirmed that President Joe Biden and the Republican wing reached an agreement in principle to raise the debt ceiling, during the night of this Saturday.

“Just got off the phone with the president a while ago,” McCarthy tweeted. “After he wasted his time and refused to negotiate for months, we have reached an agreement in principle worthy of the American people.”

As confirmed to The New York Times, AP and CNN by sources close to the talks, the agreement includes a two-year budget in which spending would remain stable in 2024 but limits would be imposed on public spending, as requested by the opposition. These conditions also include higher work requirements to access food aid.

The announcement came after Biden and the speaker of the House of Representatives, Kevin McCarthy, spoke for almost 90 minutes by phone, and after weeks of negotiations and just days after the United States entered into default, the date that the Treasury secretary American, Janet Yellen, had set June 5.

McCarthy hopes that on Wednesday the House of Representatives will vote on the bill to raise the debt ceiling, essential to avoid default.

Kevin McCarthy’s pronouncement on Twitter after announcing the principle of agreement to raise the debt ceiling.

The final text will be reviewed by both parties and, once a definitive consensus has been reached, the 72-hour rule must be followed. This defines that legislators must have three days to read the document before voting in their respective chambers, which could occur as early as the beginning of the week.

The Washington Post reported that some of the key points of the agreement are expected to reflect initial demands by Republicans after the party’s lawmakers took control of the House in January. In addition, the North American media announced that McCarthy will report what was discussed with Biden to members of his party in a conference call.

The potential deal could relieve Congress from the worst fiscal showdown in more than a decade. A similar impasse occurred in 2011, when the conservative tea party movement in the House of Representatives used the nation’s indebtedness for political leverage, forcing Democrats to agree to a decade of spending cuts and caps, reductions they say they devastated the federal programs of health, education, science and work.

The final text will be reviewed by both parties and, once a definitive consensus has been reached, the 72-hour rule must be followed. This defines that legislators must have three days to read the document before voting in their respective chambers, which could occur as early as the beginning of the week. (AP)

Although the country did not go into default at the time, the debate alone plunged the stock market and led to a rare downgrade of the United States’ credit rating.

In recent days, Wall Street has panicked again, with credit ratings agencies warning that they may lower their assessments of US debt, a move that could raise borrowing costs for both the government and consumers. citizens and companies.

If Congress approves the deal, it would extend the debt ceiling beyond the next presidential election. It would keep spending “virtually flat” on health, education, science, labor and other national agencies in fiscal year 2024, while increasing spending on defense and veterans. In 2025, non-defense spending would rise 1%, according to a person familiar with the matter.

Even with the later deadline, legislation will have to pass through Congress much faster than the normal schedule, even for the least controversial bills.

If Congress approves the deal, it would extend the debt ceiling beyond the next presidential election. It would keep spending “virtually flat” on health, education, science, labor and other national agencies in fiscal year 2024, while increasing spending on defense and veterans. In 2025, non-defense spending would rise 1%, according to a person familiar with the matter. (Reuters)

Congress adjourned for the long weekend for the Memorial Day holiday, but lawmakers are likely to be called back to vote.

Congressional staff will first have to convert the deal into legislation, and then it would normally take at least another six days to get through both houses of Congress, even without rebels getting in the way.

There is also the threat that an agreement will not be reached in Congress, as legislators from both parties have warned, or that approval of a text that would make too many concessions to the opposing camp will be delayed as long as possible.

On Friday, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said getting a deal was “critical” for the global economy, while stressing that the United States needed to do “more to reduce its public debt.”

(With information from The Associated Press and AFP)

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