Biden and McCarthy reach ‘agreement in principle’ on debt

The specter of a global financial crisis is receding. A few days before the deadline, US President Joe Biden and Republican leader Kevin McCarthy reached an “agreement in principle” on Saturday to avoid a default in payment by the United States.

However, this compromise must now be validated by Congress. The House of Representatives, with a Republican majority, will vote on Wednesday, its boss said. Next will come the Senate, with a Democratic majority. Kevin McCarthy also indicated that he would meet again this Sunday with Joe Biden and would publish the text the same day, the result of difficult negotiations.

“Good news” according to Biden

The Republican leader estimated in a short speech that the budgetary compromise found, of which he did not give the details, was “completely worthy of the American people”. The conservative leader only welcomed the “historic reductions” in public spending that the agreement provides, according to him, which was the main demand of the Republicans.

“This agreement is a compromise, which means that everyone does not get everything they want”, reacted for his part Joe Biden, assuring that the text “reduces expenses while protecting essential public programs”. The Democratic president called the agreement with the Conservatives “good news, because it avoids what would have been a catastrophic (payment) default”.

June 5 deadline

According to several American media, the agreement reached between the executive and the opposition raises for two years, so until after the presidential election of 2024, the public debt ceiling of the United States. Without raising this limit, the first world power risked being in default of payment on June 5, unable to honor its financial commitments: salaries, pensions or reimbursements to its creditors.

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The agreement will therefore now have to be validated by the Senate and the House of Representatives. Some progressives within the Democratic Party, as well as elected members of the Republican Party, have threatened not to ratify, or to delay as much as possible a text that would make too many concessions to the opposing camp. A Republican elected to the House of Representatives, Bob Good, thus estimated on Saturday that in view of what he knew of the compromise, “no elected representative claiming to be from the conservative camp could justify a positive vote”. The smoke is not yet quite white in Washington.

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