President Joe Biden and Republican leader in Congress Kevin McCarthy are putting the final touches this Sunday to their agreement announced the day before and which should allow the United States to avoid a cataclysmic default. “I am about to call Kevin McCarthy at 3 p.m. (8 p.m. in France) so that everything is square and that the dots are well on the i”, declared the American president of return at the beginning of the afternoon to the White House. And to add, for journalists: “I think we are good”.
After marathon negotiations, President Biden and the Republican leader announced Saturday evening an agreement in principle on the raising of the American debt ceiling allowing to remove the threat of bankruptcy from June 5. But the agreement must receive the approval of a divided Congress and is already the subject of a sling of elected progressives and conservatives some speaking of a “capitulation”.
“It may not satisfy everyone, but it’s a step in the right direction that no one expected,” the Republican leader defended on Fox News on Sunday, welcoming in particular a ” new downward trajectory” given to public spending. He predicted that a “majority” of elected Republicans would vote for the text. The House of Representatives, where Republicans have a fragile majority of 222 to 213, will vote on Wednesday. Next will come the Senate, narrowly controlled by the Democrats (51-49).
President Biden welcomed this “compromise” on Saturday evening, which is “good news, because it avoids what would have been a catastrophic (payment) default”. Kevin McCarthy felt that he was “completely worthy of the American people”.
Raising the debt ceiling
The text of the agreement has not yet been disclosed but in broad outline it raises for two years, so until after the presidential election of 2024, the public debt ceiling of the United States. This is currently set at $31.4 trillion. Non-defence spending will remain virtually unchanged next year and will increase only nominally in 2025.
It also provides for a $10 billion drop in funds allocated to the tax services to modernize and strengthen controls, as well as the recovery of funds allocated to the fight against Covid-19 that have not yet been spent. The compromise also includes new conditions imposed to benefit from certain social aids, including food stamps.