Democrats and Republicans reach an agreement in principle to raise the US debt ceiling

The White House and the Republicans have reached this Saturday a “in principle agreement” to raise the debt ceiling and prevent the United States from going into suspension of payments, has confirmed the president of the US, Joe Biden, and the president of the House of Representatives, Kevin McCarthy.

“I just got off the phone with the president a while ago. After he wasted his time and refused to negotiate for months, we have reached an agreement in principle that is worthy of the American people,” McCarthy said in a message via Twitter. social networks that collects efe.

Minutes later, in a brief appearance before the press, McCarthy assured that the agreement includes a “historic” reduction in public spending and reforms that “will lift people out of poverty and into the workforce.”

In addition, he stressed that does not contain new taxes No new government programs. “We still have a lot of work to do tonight to finish all the text” of the agreement, warned the leader of the Republicans in Congress, who did not want to answer questions from the press.

This decision is known a few hours after the telephone conversation that President Joe Biden had with McCarthy this afternoon.

“Not Everyone Gets What They Want”

For his part, President Biden has assured that “it is an important step forward that reduces spending while protecting critical programs for workers and grows the economy for everyone“.

aside, too protects the “key priorities” of the presidency and “the legislative achievements of the Democrats in Congress,” as the president has written on his Twitter account.

“The agreement represents a compromise, which means that not everyone gets what they want. That is the responsibility of governing” he specified, to which he added that “it is good news for the American people, because it avoids what could have been a catastrophic payment default and would have led to an economic recession, devastated retirement accounts and millions of jobs lost.

He ended by explaining that “during the next day, our negotiating teams will finalize the legislative text and the agreement will go to the United States House and Senate. I strongly urge both chambers to approve the agreement immediately,” according to a publication Europe Press.

Next steps

When a definitive agreement is reached, the 72-hour rule will have to be followed, which gives legislators three days to read the text before voting on it in the camera.

Thus, the consensus that will increase the federal debt limit in exchange for spending cuts called for by Republicans must be turned into legislative language and passed in both the Republican-led House of Representatives and the Republican-controlled Senate. democrats.

On Friday, Treasury Secretary Janet Yellen updated her estimate of the deadline after which the country could find itself in default if Congress does not first agree to raise or suspend the debt ceiling. Yellen reported that the date will be June 5four days later than the estimates he had previously made.

The debt limit is the total amount of money that the United States Government is authorized to borrow to meet your existing legal obligations to pay Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.

From time to time, the United States faces default on its national debt because, unlike other countries, the government can only issue debt up to the limit established by Congresswho has the power to raise that ceiling as he sees fit.

On January 19, the country reached its legal debt limit of 31.4 trillion dollars, equivalent to 29 trillion euros, which led the Treasury Department to resort since then to extraordinary measures to pay the billssuspending some payments to the retirement funds of federal employees and to the social security of postal employees, among others.

The use of these special financial tools can be extended until June 5, at which time the United States would enter in suspension of payments if Republicans and Democrats do not reach an agreement.