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30-05-2023
WASHINGTON: United States President Joe Biden has finalised an agreement with House Speaker Kevin McCarthy to raise the debt ceiling over two years until January 1, 2025, saying the deal is ready to move to Congress for a vote.
The Democratic president and Republican speaker spoke on Sunday evening as negotiators rushed to draft and post the bill’s text to enable lawmakers to review compromises that are unlikely to be popular with progressive Democrats or hard-right Republicans.
The two men hope they can secure sufficient votes before the June 5 deadline to avert a first-ever default by the federal government. A vote in the House is expected on Wednesday.
“Good news,” Biden declared on Sunday evening at the White House.
“The agreement prevents the worst possible crisis – a default – for the first time in our nation’s history,” he said. “Takes the threat of a catastrophic default off the table.”
The deal follows weeks of heated negotiations between Biden and Republicans to avoid a default that could cause financial markets to freeze up and lead to an international financial crisis.
Analysts say millions of jobs would vanish, borrowing and unemployment rates would jump, and a stock market plunge could erase trillions of dollars in household wealth. A default would all but shatter the $24 trillion market for treasury debt.
Biden said he expected McCarthy to have the necessary votes for the deal to pass.
The compromise announced late on Saturday includes spending cuts, but risks angering some lawmakers as they take a closer look at the concessions.
The 99-page bill will also claw back unused COVID-19 funds, speed up the permit process for some energy projects and include extra work requirements for food aid programs for poor Americans.
Senate Republican Leader Mitch McConnell applauded the agreement and called on the Senate to act swiftly to pass it without unnecessary delay once it has gone through the House.
“Today’s agreement makes urgent progress toward preserving our nation’s full faith and credit and a much-needed step toward getting its financial house in order,” McConnell said.
McCarthy dismissed threats of opposition within his own party, saying “over 95 percent” of House Republicans were “overwhelmingly excited” about the deal. (Int’l Monitoring Desk)
