- The White House and the US House of Representatives have agreed on a debt limit.
- The agreement protects the world’s largest economy from defaults.
- The two parties were only able to reach the agreement after weeks of tough arguments.
In the US debt dispute President Joe Biden and Republican Kevin McCarthy have made a breakthrough and likely averted a default in the world‘s largest economy. Biden and the Republican chairman of the House of Representatives said in Washington on Saturday that they had reached a preliminary agreement. The project still has to be approved by Congress.
Biden said according to the White House, it is an important step forward that will reduce spending while protecting vital programs for working people and strengthening the economy for all. In addition, the agreement protects the most important parts of his agenda. “The agreement represents a compromise, which means that not everyone gets what they want.” Over the next few days, the negotiating teams would finalize the text of the law. The agreement will be forwarded to the House of Representatives and Senate. “I urge both chambers to pass the agreement immediately.”
“We have agreed in principle”
After speaking to Biden on the phone, McCarthy said: “After weeks of negotiations, we have reached an agreement in principle. We still have a lot of work ahead of us. But I believe that this is fundamentally an agreement that is worthy of the American people. ”The draft law will now be completed overnight and on Sunday – it should be finally approved on Sunday afternoon in cooperation with Biden. A vote in the House of Representatives is planned for Wednesday.
The draft must be passed in both chambers of Congress and signed by the President as quickly as possible so that an impending US government default is actually averted. US Treasury Secretary Janet Yellen recently warned that the money could run out on June 5th. This was preceded by an intense argument that even prompted US President Joe Biden to cancel trips abroad.
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