Towards a way out of the crisis in the United States? IUS President Joe Biden and Republican Leader Kevin McCarthy reached a preliminary agreement on an increase in the debt ceiling – and a limitation of public spending – for a period of two years, Kevin McCarthy, Speaker of the House of Representatives, announced on Twitter on Saturday May 27. A step forward for the US government and parliamentarians, who fear a payment default with serious consequences.
Joe Biden and Kevin McCarthy must now sell this agreement to their respective camps within both houses of Congress. As a reminder, the Republicans control the House of Representatives, while the Democrats control the Senate. But the schedule remains tight: the agreement must be ratified by June 5 at the latest, the deadline set by Treasury Secretary Janet Yellen. Beyond that, the country will no longer be able to honor its financial obligations.
Quoted by NPR Radio, Kevin McCarthy hopes that this validation will come sooner, around Wednesday, June 1. “We still have a lot of work to do, did he declare, but I think it’s a tentative agreement worthy of the American people.”
Like almost all major economies, the United States lives on credit. But unlike other developed countries, they regularly come up against a legal constraint: the debt ceiling, the maximum amount of indebtedness of the United States, which must be formally raised by Congress. From this routine legislative procedure, the Republicans have made an instrument of political pressure, by conditioning any increase in this ceiling, currently set at 31.4 trillion dollars, on budget cuts.