Agree in principle
After a series of tough negotiations, US President Joe Biden and House Speaker Kevin McCarthy on May 27 (local time) reached an "agreement in principle" to temporarily lift the public debt limit and cut some federal government spending for 2 years. Accordingly, the US government's borrowing will be allowed to exceed the ceiling of 31.4 trillion USD until January 2025, after the next presidential election in this country.
President Biden, Vice President Harris and US congressional leaders in a meeting at the White House
"The agreement represents compromise, which means not everyone gets what they want. That's the responsibility of government," Biden said in a statement released by the White House on the evening of May 27, according to the AP news agency. The Democratic leader said the agreement was "good news for the American people, because it prevents what could have been a catastrophic default."
In a brief press conference at the Capitol on the evening of May 27, Mr. McCarthy, a Republican, said the agreement contained "historic cuts in government spending," but "we still have a lot of work to do tonight to finalize the text (of the bill)." He also said the agreement was worthy of the American people.
The pressure is not gone yet.
Lawmakers and the White House are under pressure to act quickly. Treasury Secretary Janet Yellen has warned that the government could run out of money to pay its debts as soon as June 5, a scenario that could have profound economic and financial consequences.
To avoid default, the House and Senate must approve the deal and send it to President Biden for his signature. This will be a major challenge for both McCarthy and House Democratic leader Hakeem Jeffries. Now, both will have to assemble a bipartisan coalition to pass the deal in the House, which Republicans control by a slim majority (222-213).
What concessions did President Biden make?
At the heart of the weeks-long negotiations has been Republicans’ demand for cuts to the federal budget in exchange for raising the debt ceiling. According to The Wall Street Journal, President Biden appears to have made a concession by agreeing to keep non-defense spending at this year’s level in 2024 and increase it by just 1% in 2025.
The deal also includes a provision that would force a 1% cut in government spending if all 12 appropriations bills are not passed by the end of the year. However, the deal is expected to raise US defense spending to $885 billion, up about 11% from the $800 billion allocated in the current budget.
Some right-wing lawmakers who have called for even deeper budget cuts have expressed displeasure with the deal. Republican Rep. Bob Good tweeted that he had heard the deal would add $4 trillion to the national debt, and said that anyone who calls themselves a Republican could not vote for it.
In a statement on the evening of May 27, President Biden called on both houses of Congress to quickly pass the agreement. Meanwhile, Mr. McCarthy said the complete content of the bill will be announced on May 28 and the vote in the US House of Representatives may take place on May 31.
Mr McCarthy has repeatedly said he believes a majority of his party's House members will vote for the deal, but it remains unclear how many Republicans will support it - nor how many Democrats might need to vote yes to offset Republican nays.
The road could also be bumpy in the U.S. Senate, where swift action requires bipartisan support and conservatives have signaled they are not ready to go along, according to The New York Times . Democrats currently control the chamber with a 51-49 majority, as well as Vice President Kamala Harris’s tie-breaking vote.
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