Home » US debt, agreement reached between Biden and McCarthy: default avoided

US debt, agreement reached between Biden and McCarthy: default avoided

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US debt, agreement reached between Biden and McCarthy: default avoided

Escaped danger. After a marathon of talks, negotiations, and even dawn bike rides, Republicans and Democrats have struck a deal that will avert the first default in US history. According to White House sources to the New York Times, it is an “agreement in principle” which provides for the raising of the debt ceiling for the next two years in exchange for cuts to the administration’s programme.

There is still no official announcement but Joe Biden from Camp David spoke with the Speaker of the House, the Republican Kevin McCarthy, and the minority leader Hakeem Jeffries. Congressional approval of the plan before June 5, when the Treasury will run out of resources to finance the federal government as explained by secretary Janet Yellen, has not been secured, particularly in the House where Republicans have a narrow majority.

But the compromise has the blessings of Biden and McCarthy, and is the only chance to break the fiscal stalemate that has gripped Washington and the United States for weeks with the threat of an economic crisis of global dimensions. The details of the agreement have not yet been revealed, however in recent days the most difficult knot to unravel had seemed to be that of the requirements for access to welfare which according to the Republicans are too generous.

For McCarthy this is a “red line” for any agreement on the debt ceiling but the American president has always been adamant on this issue, that of benefiting the most needy people is the flagship of his agenda. “I don’t bow to anyone,” the president said about the requests of the Grand Old Party.

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