After weeks of negotiations, USA will be saved from acatastrophic bankruptcy” that could have led the country to a “economic recession“, in the words of the president Joe Biden. The president arrived this Saturday at a principle of agreement with the president of the House of Representatives, the republican kevin mccarthyto raise the debt ceiling current of $31.4 trillion for a period of two years, the remainder of the mandate, and thus be able to pay all debts.
McCarthy announced the pact on Twitter and later in an appearance on Capitol Hill. “After he wasted his time and refused to negotiate for months, we have reached an agreement in principle. We still have a lot of work to do. But I think it’s a pact worthy of the American people“, he claimed.
For his part, the president ratified that the draft bill to raise the debt limitwhich he refers to as “budget agreement“, is “a commitment”. Now, the pact must be voted on in the House of Representatives and the Senate next week with urgency next week to avoid non-payment of government obligations.
“No everyone gets what they want”
Details of the agreement have not yet been disclosed, but it involves spending limits for two years. “Contains historic spending reductions, reforms consistent actions that will lift people out of poverty and into the working market. Corrects the excesses of the Government. There are no new taxes, no new government programs,” he added. McCarthy.
Republicans are poised to deliver big, consequential change in Washington. Soon, we will vote for a responsible debt limit agreement that stops Democrats’ reckless spending, claws back unspent COVID funds, blocks Biden’s new tax schemes, & much, much more https://t.co/TQ7CblFsaM
—Kevin McCarthy (@SpeakerMcCarthy) May 28, 2023
“Reduce spending while protects critical programs for workers and grows the economy for everyone. In addition, the agreement protects my top legislative priorities and accomplishments and those of the Democrats in Congress. The agreement represents a compromise, which means that not everyone gets what they want. That is the responsibility of governing, “Biden has qualified in his statement, while urging Congress to approve the new law.
Bankruptcy as of June 5
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every so often, The United States is facing default on the national debt because, unlike other countries, the Government can only issue debt up to the limit established by Congress. The country reached its legal debt limit of 31.4 trillion dollars on January 19, equivalent to 29 billion euros, which led the Treasury Department to resort since then to extraordinary measures to pay the bills, suspending some payments to retirement funds of federal employees and the social security of postal employees, among others.
The Republican leader reported that he will talk again with Biden on Sunday, while supervising the final draft of the bill. If this is not achieved, the United States could incur a ‘default’, since the US Treasury would stop meeting its financial commitments on 5th June.