US debt ceiling agreement faces crucial days

The president of the United States, Joe Biden, said he was “very comfortable” with the budget and debt ceiling deal negotiated with House Speaker Kevin McCarthy as the White House and congressional leaders worked to secure its passage this week, in time to raise the debt limit of the nation and avoid a disastrous federal default.

Biden spent part of the holiday from Memorial Day in Wars working on the phone, calling legislators from both parties to help get the votes.

Several right-wing conservatives criticize the deal for failing to provide the deep spending cuts they wanted, while liberals questioned policy changes such as new work requirements for older Americans enrolled in the food aid plan.

The moment of truth will come on Tuesday afternoon, when the House Rules Committee meet to study the package and vote on whether to send it to the full institution for a vote scheduled for Wednesday.

“I am very happy with the agreement“, said Biden to reporters Monday as he left Washington for his home in Delaware.

“I have spoken to a number of members”, he added, among them with the leader of the Republicans in the Senate, mitch mcconnell, who in the past was an important ally in bipartisan agreements but on this occasion was practically left out. “I’ve talked to a lot of people, and it feels good”.

For progressive Democrats who have raised reservations about the package, the president has a simple message: “Talk with me”.

As lawmakers mull over the 99-page bill, few are expected to be fully satisfied with the final product. But Biden, a Democrat, and McCarthy, a Republican, count on achieving majority support from the political center. It’s not often that a divided Washington comes together to avoid a catastrophic federal default.

Wall Street will offer its own assessment of the deal early on Tuesday, as US financial markets, closed when it was reached over the weekend, will begin to react.

McCarthy acknowledged that the difficult compromise reached with Biden will not be “what nobody wants 100%”, as he leads a slim majority in the House driven by far-right conservatives.

Given the possible rejection of his ranks, the speaker of the House will have to trust more than half of the Democrats and Republicans to get the debt ceiling package approved.

Overall, the deal is a compromise that will impose some spending cuts over the next two years, plus a suspension of the debt limit until January 2025, leaving this volatile issue until after the next election campaign. Raising the debt limit, which is now at US$31 trillion, will allow the Treasury to continue borrowing to pay the debts already contracted by the State.

Source: AP