2023-05-28 23:48:01
Studious and fruitful Saturday in Washington. Negotiators from the White House and Congress, who have been discussing for several days to avoid a default of payment by the United States, which implies voting for an increase in the legal federal debt ceiling, have finally reached an agreement.
This was endorsed in the evening by the two leaders, President Joe Biden and Speaker of the House of Representatives Kevin McCarthy, after a telephone conversation which lasted 90 minutes. “We still have a lot of work to do, but I think this agreement in principle is worthy of the American people,” Kevin McCarthy told reporters on Saturday evening.
“This agreement is a compromise, which means that everyone does not get everything they want”, reacted for his part Joe Biden, assuring that the text “reduces expenses while protecting essential public programs”. The Democratic president called the agreement with the Conservatives “good news, because it avoids what would have been a catastrophic (payment) default”.
It is now necessary to draft a bill, and convince parliamentarians to vote on it before the fateful date of Monday, June 5. That is one week to act, and conclude.
The details of the agreement were outlined on Saturday evening by Kevin McCarthy to members of the Republican Party. As for Joe Biden, he waited until Sunday to present the agreement to the foot soldiers of the Democratic Party, so that Kevin McCarthy had time to assert his victories with the Republicans.
“The deal prevents the worst possible crisis, a default for the first time in the nation’s history, a recession, devastated pensions, millions of jobs lost; but it also protects key priorities, victories and values for which Democratic parliamentarians and myself fought for a long time”, assured Joe Biden Sunday evening to the media.
The center is courted
No party is able to pass a text raising the debt ceiling without convincing parliamentarians on the other side. While the center is courted, radicals on the left and right are likely to oppose the solution worked out in small groups.
For Kevin McCarthy, who was narrowly elected Speaker of the House despite the pledges given to the ultras of his party, the risk would be that they disown him and remove him from office. But he can also emerge from the ordeal as the opponent who managed to extract spending cuts from the Democratic president.
For Joe Biden, who is a candidate for the renewal of his mandate in 2024, it was imperative to avoid a default which would have precipitated the United States and the rest of the world into a serious financial and economic crisis. But he risks alienating the most progressive in his party, who believe the constitution allows the president to bypass Congress when America’s credit is at stake.
Work to get food aid
The agreement outlined Thursday aimed to raise the debt ceiling of the United States for two years, and to limit the increase in federal spending during this period. Excluding the military budget, spending will indeed remain stable in 2024, and will only increase by 1% in 2025.
Some unspent Covid credits will be canceled, nearly $29 billion according to the Wall Street Journal. Additional funds for the fight against tax evasion will be cut by 10 billion.
On Thursday, President Biden had not closed the door to additional constraints for the beneficiaries of the food aid program, to the chagrin of the Democrats. According to the agreement in principle, the obligation to work, which already exists for 18-49 year olds without dependents, would be extended to 54, but this obligation would end in 2030. Veterans and the homeless would be exempt from the work obligation.
The Inflation Reduction Act’s clean industry tax credits and student debt forgiveness, two election victories for Joe Biden, would be spared.
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