May 27, 2023, 10:23 PM
May 27, 2023, 10:23 PM
President Joe Biden and Republican lawmakers reached an agreement in principle on Saturday to raise the debt ceiling for the United States, in a crucial first step to avoid a catastrophic default of the world’s largest economy.
This commitment, the fruit of arduous negotiations, must be endorsed urgently in Congress by the Senate and the House of Representatives.
Party leaders now face a race against time to get the deal through Congress, with the far-right Republicans and progressive Democrats criticizing the concessions made to seal the deal.
The understanding came after Biden spoke Saturday night with House Republican leader Kevin McCarthy, as well as Democratic leaders in both houses of Congress, according to a source close to the negotiations.
“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.”
McCarthy expects the House of Representatives to vote on the bill to raise the debt ceiling essential to avoid cessation of payments.
In addition, the Republican leader reported that he will talk again with Biden on Sunday, while supervising the final draft of the bill, the result of tough negotiations.
If this is not achieved, the United States could incur a default, since the US Treasury would stop meeting its financial commitments on June 5.
Biden had sounded quite “optimistic” about the possibility of a deal on Friday, as had McCarthy, who earlier on Saturday said he felt “closer to a deal now than he had been in a long time.”
One of the main points of disagreement between the two ranks is the request of the Republicans to condition certain social benefits, such as food aid at work.
“I don’t think it’s right to borrow money from China to pay people who are healthy and don’t have dependents to hang out on their couch. It’s not the American way of doing things… That’s not what we believe in.” lashed out McCarthy, who declares himself an uncompromising defender of fiscal discipline.
White House deputy spokesman Andrew Bates criticized Republicans for jeopardizing “more than eight million jobs” while trying to “take bread out of the mouths of hungry Americans.”
Bidenalready campaigning for his re-election in 2024, promotes himself as a fighter for social justice and prosecutor and has repeatedly said he opposes massive budget cuts that would hit the most precarious workers and households.
Even with the later deadline, legislation will have to pass through Congress much faster than the normal schedule, even for the least controversial bills.
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 agreement into legislative text and then it would normally take another six days minimum to get ahead in both chambers of Congress, even without rebels to get in the way.
Also there is a threat that an agreement will not be reached in Congress, as legislators from both parties have threatened, or to delay as long as possible the approval of a text that would make too many concessions to the opposing camp.
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.”
