US President Joe Biden and Republican House Speaker Kevin McCarthy have sealed their compromise on a bill to avert the United States from default. “Speaker McCarthy and I have reached a bipartisan budget agreement that will prevent the worst crisis — a default for the first time in our country’s history,” Biden said. Previously there had only been talk of a “provisional agreement”.
The deal is “good news” for the American people, Biden continued. He called on Congress to immediately pass the deal to raise the US debt ceiling through 2025 in exchange for significant spending cuts. McCarthy called the House of Representatives back to Washington for a vote on the deal on Wednesday. Actually, the Chamber of Congress has a break in session until June 5th. The bill must be passed in both chambers of Congress – the House of Representatives and the Senate – and signed by the President as soon as possible so that the US government does not run out of money.
US Treasury Secretary Janet Yellen recently warned that the money could run out on June 5th. This was preceded by an intense dispute that even prompted Biden to cancel trips abroad. Biden and McCarthy had praised the compromise: Biden announced on Saturday that it was an important advance that would reduce spending while protecting important programs for working people and strengthening the economy for all. In addition, the agreement secures the most important parts of his agenda.
However, the 80-year-old Biden also acknowledged “that not everyone gets what they want.” McCarthy spoke of an “agreement worthy of the American people.” On Fox News, he said confidently: “I think the majority of Republicans will vote for this bill.” President Biden also supports the text, “so I think many Democrats will vote for it.”
There are still many question marks
Approval in the House of Representatives on Wednesday is likely, but not guaranteed. The situation in the chamber is particularly muddled because the Republicans have a very narrow majority. There are also radical MPs in the parliamentary group who show no interest in a realistic compromise. McCarthy was only elected chairman by his group at the beginning of the year after a historic election chaos. This had greatly weakened his position.
US Treasury Secretary Yellen has repeatedly warned of the consequences of a default in recent weeks
The dispute over the debt limit is a major test for McCarthy, in which he must deliver results for his party. He must also succeed in rallying a few radicals behind the agreement in order to have the broadest possible majority in his party. If he had to rely on a particularly large number of votes from the Democrats because his party colleagues opposed him, that would further weaken him. The compromise that has now been reached is intended to effectively freeze the size of the federal budget, which the Democrats under Biden actually wanted to increase.
The budgets of many federal agencies and ministries would be adjusted for this. McCarthy spoke of “historic spending cuts” that would not be accompanied by new taxes or government programs. The Democrats actually wanted to increase state revenues by taxing the rich more heavily. The Republicans opposed it. During the negotiations, they had urged Biden to make cuts in the social sector in exchange for an increase in the debt ceiling.
haz/se (dpa, afp, rtr)