US President Joe Biden and House Speaker Kevin McCarthy reached a preliminary agreement on Saturday to raise the debt ceiling for two years, while cutting and trimming some government spending over the same period. This was a breakthrough after the marathon crisis negotiations, which kept the country days away from the first bankruptcy in history – he wrote New York times.
It is not yet certain that Congress will pass the plan before June 5th, when the Treasury Department is expected to exhaust its ability to pay. Republicans hold a slim majority in the House of Representatives, and right-wing lawmakers who have demanded deeper budget cuts in return for an increase in the borrowing limit are already starting to revolt. But the compromise, which would effectively freeze federal spending, has the support of both the Democratic president and the Republican House speaker.
All this raised the hope that he could solve the budget impasse that has plagued Washington and the country for weeks and threatens an economic crisis.
In a statement from the White House late last night, Joe Biden urged the House and Senate to pass the deal, saying it would prevent a catastrophic default.
This is an important step forward that will reduce spending while protecting vital programs for workers and developing the economy for all
He said.
The president and McCarthy spoke by phone Saturday night to settle the final points of contention. In a nightly news conference outside his Capitol office that lasted just a minute,
McCarthy said the deal includes “historic spending cuts, consistent reforms that lift people out of poverty and into the workforce, restrain government overreach,” and no new taxes. He declined to answer questions or provide details, but said he plans to publish the text of the legislation on Sunday.
We still have a lot of work to do tonight to finish drafting the law
He said.
