The White House and the Republicans reached this Saturday an “agreed principle” to raise the debt ceiling and prevent the United States from go into suspension of paymentsconfirmed President Joe Biden and the leader of the House of Representatives, Kevin McCarthy.

“I just got off the phone with the president. After he wasted his time and refused to negotiate for monthswe have reached an agreement in principle that is worthy of the American people,” McCarthy said in a message on social media.

Minutes later, in a brief appearance before the press, the Republican assured that the agreement includes a “historic” reduction public spending and reforms that “will lift people out of poverty and into the workforce.

He further stressed that does not contain new taxes or new programs of the government. “We still have a lot of work to do tonight to finish all the text” of the agreement, warned the leader of the Republicans in Congress, who did not want to answer questions from the press because he first wanted to tell lawmakers from his party the details. of the pre-agreement

McCarthy detailed that legislators will continue with the drafting of the bill tonight. After this he will consult with the White House, he will speak with Biden “tomorrow afternoon” before publishing the text, that will be voted on Wednesday 31.

An hour after McCarthy’s appearance, President Biden released a statement acknowledging that the agreement in principle cGets concessions from Democratsbut maintains the “key priorities” of his government.

“The agreement represents a commitment, which means that not everyone gets what they want. That is the responsibility of governing,” he asserted. However, he added, the agreement “protects” its “key priorities” and “the legislative gains of Democrats in Congress.”

“It’s an important step forward that reduces spending while protecting critical worker programs and grows the economy for everyone,” Biden added. The president confirmed that bipartisan bargaining teams are tasked with finalizing the bill, which will be voted on in both the Republican-controlled House of Representatives and the Senate (controlled by the Democrats) “I strongly urge both chambers to pass the agreement immediately,” he concluded.

The United States reached its legal debt limit in January

The pre-agreement comes a day after Treasury Secretary Janet Yellen updated to June 5 her estimate of the deadline after which the country could be forced into suspension of payments.

The debt limit is the total amount of money the United States Government is authorized to borrow to meet its existing legal obligations to pay Social Security and Medicare benefits, military salaries, interest on the national debt , tax refunds and other payments.

From time to time, the United States looks at the non-payment of the national debt because, unlike other countries, the Government can only issue debt up to the limit established by Congress, which has the power to raise that ceiling as it sees fit.

The country reached on January 19 its legal debt limit of $31.4 trillionwhich led the Treasury Department to resort to extraordinary measures ever since to pay the bills.

When the agreement is finalized and approved in the chambers a period of strong confrontation will end between Democrats and Republicans, who had been unsuccessfully trying for months to come together on this issue. Biden has been blunt in these months to make concessions, accusing “the MAGA Republicans in Congress”, in reference to the most radical legislators of the party who follow former President Donald Trump (2017-2021), of threatening the country’s progress with lawsuits. “completely” unacceptable.

However, the negotiations intensified in recent weeks, with the deadline approaching, an urgency that led President Biden to return before his trip to Japan for the G7 summit.

Institutions such as the Federal Reserve (Fed) have warned these months about the risks of not raising the debt ceiling. Failure to do so, recently warned its president, Jerome Powell, “would be unprecedented” and “we would be in unknown territory” whose consequences “they would be very uncertain.”

International organizations such as the International Monetary Fund (IMF) have also been warning about the urgent need for Congress act now that failure to do so will have “serious repercussions” for both the US and global economies.