USA: The White House and Republicans have reached an agreement to raise the government’s debt ceiling

USA: The White House and Republicans have reached an agreement to raise the government’s debt ceiling


US President Joe Biden and Republicans in Congress reached a preliminary agreement on Saturday night to raise the US government debt limit, which currently stands at $31.4 trillion.

In the absence of an agreement, the US government after June 5 would run out of funds for the planned payments, among others to social security funds and health insurance for seniors (Medicare).

The compromise was announced by Speaker of the House of Representatives Kevin McCarthy, who spoke by phone with US President Joe Biden on Saturday night.

“Just got off the phone with the president. After he wasted his time and refused to negotiate for months, we have come to an agreement that is fundamentally worthy of the American people,” McCarthy tweeted.

In turn, Biden described the agreement as “an important step forward” that protects key Democratic priorities. “The agreement is a compromise, which means that not everyone will get what they want,” he said in the communiqué. “That is the responsibility of governing.”

The terms of the agreement are to be formulated as a legislative document as soon as possible, which will then be voted on in Congress. The vote in the Republican-controlled House of Representatives will take place on Wednesday.

Crisis negotiations conducted on the brink of state insolvency have become an American tradition in recent years, repeated every dozen or so months (the last one took place in December 2021). So far, each time Congress has agreed to compromise and raised the financial ceiling.

This time, however, the unrest was greater than usual, mainly due to the ever-increasing polarization, as well as the balance of power in Congress, which gives the extreme wing of the Republican Party disproportionate influence over decisions made by the speaker and the parliament.

The Republicans proposed that they would agree to raising the limit in exchange for deep cuts in budget spending (including for social programs). Biden, who initially demanded an unconditional increase in the cap, eventually agreed to freeze spending at this year’s level. (PAP)

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