No way. The round of talks on May 22 was “productive”, but no agreement was reached between US House Speaker Kevin McCarthy and President Joe Biden on raising the debt ceiling to avoid default. McCarthy himself believes an agreement is needed within 24-48 hours to give Congress time to vote on it. “The only way forward is a bipartisan agreement,” says Biden, assuring that “default is not an option.” McCarthy and Biden met in the White House in the evening, after Treasury Secretary Janet Yellen warned that it was “very likely” that her department will run out of reserves and be forced to declare default on June 1. The tones, McCharty assures, were “better than any other time”, but the final agreement remains pending.
The clash over public spending and the defense budget
Relations seem relaxed, but the Speaker reiterates the stakes of the US right. One of the main ones is the rejection of changes to the tax system as part of the debt package. “We’re not looking for revenue,” he stressed. The stalemate on the debt ceiling is increasing the strain on the US economy, already vulnerable to the effects of the recession after the tightening launched by the Federal Reserve. The Republicans are pressing for the longest possible spending cuts, while the Democrats hypothesize more tenuous cuts over a couple of years and limits on defense spending: a proposal categorically rejected by the right, intent on increasing the Pentagon budget against of social spending. However, observers consider the signs emerging from the McCharty-Biden dialogue to be “good”, with a “50%” possibility of an agreement within 48 hours.
