The White House and Republican-majority negotiators in the House of Representatives reached an agreement on Saturday night to raise the debt ceiling. This seems to ensure the payment of US debts and avert a financial crisis with a possible international impact. The deal still needs to be approved by the House and Senate.
President Joe Biden and Republican House leader Kevin McCarthy each issued separate statements on Saturday — and the coolness of both statements reflected exasperation over the lengthy negotiations. Biden characterized the “agreement in principle” in a written statement as “good news for Americans.” This, according to Biden, prevented the United States from defaulting on its creditors, “which would have led to an economic recession, devastated pension funds and millions of lost jobs.”
Biden said a “limitation” of spending has been agreed, as the Republicans wanted, but that “vital programs for working people” will be spared. According to him, the most important priorities of himself and the Democrats in Congress are also safeguarded.
That was certainly not the message Speaker McCarthy was conveying in his brief statement in front of the press. He only mentioned the gains for the Republicans. According to him, a “historic reduction in government spending” has been agreed. He said there will be “no new taxes,” “no new government programs,” and that “government control will be limited.”
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A compromise
Biden called the deal “a compromise, meaning not everyone gets what they wanted. That’s what happens when you manage responsibly.” In doing so, he explicitly acknowledges that he has abandoned his initial position. Biden refused to negotiate for a long time about raising the debt ceiling, necessary to meet financial obligations already entered into.
McCarthy underlined that “a lot of work still needs to be done” before the bill can go to the House and then the Senate for a vote. On Sunday, he promised, the draft of the law will be ready for a vote on Wednesday. Monday is Memorial Day, a holiday in the United States.
American media reported that it concerns an increase in the debt ceiling for a period of two years. On Friday, Secretary of the Treasury Yellen increased the pressure on the negotiations by announcing that, in her estimation, the US government would no longer be able to pay its debts from June 5 without a deal. Defense spending would remain unaffected in the agreement.