Agreement on debt in the US undergoes a litmus test in Congress

The agreement that seeks to increase the capacity of United States borrowing to avoid a default, achieved after marathon negotiations between President Joe Biden and the Republicans, arrives this Wednesday at the House of Representatives for a vote that is expected to be stormy.

Congress has a few days to spare before the country’s treasury begins to falter, which will happen as of June 5, according to an estimate by Treasury Secretary Janet Yellen.

The terms of the agreement reached between Biden and the Republican leader of the House of Representatives, Kevin McCarthy, still require the approval of lawmakers, some of them fierce opponents of the initiative.

The United States risks a default or cessation of payments on its obligations, something unprecedented that can have catastrophic consequences for the economy.

On Tuesday, the House Rules Committee gave a first indication of the expected trend in voting on the bill, seven votes to six, with two Republicans and four Democrats against.

Now it is up to the congressmen of the House of Representatives, with a Republican majority, to rule on Wednesday’s vote scheduled in plenary session before the Senate, with a Democratic majority.

The head of the Republican camp in the chamber, Kevin McCarthy, acknowledged that he will not achieve unanimity, but he was optimistic of reaching the “greater” budget cuts history, he told reporters.

“Speaker” McCarthy still has a tough task ahead: convincing the Republican majority to adopt the new law so that it does not appear to depend on Democratic representatives.

On their side, the Democratic leaders, despite the cuts to the government budget, promised to contribute the votes that would be missing.

House Democrats will vote to “the country does not go into default. Spot”, declared his boss, Hakeem Jeffries.

Joe Biden, who visits Colorado on Wednesday night, wanted the text to pass the first vote before his arrival in that western state. On Tuesday he had invited “firmly” legislators to make it law.

“Let us continue advancing in the fulfillment of our obligations and let us build the most powerful economy in the history of humanitythe president said on Twitter.

“bad deal”

Nancy Mace, a Republican congresswoman for the state of South Carolina, said Tuesday on Twitter that she will not vote in favor of the text.

“This ‘agreement’ formalizes the expected record level of federal spending during the pandemic and makes it the baseline for future spending”, criticized Mace.

Chip Roy, a Texas congressman belonging to the Republican wing that supports former President Donald Trump, said he is a “bad deal“for which”no republican should vote”.

“We will continue the fight today and tomorrow, no matter what.Roy assured.

Some Republicans are even considering a vote of no confidence to force Kevin McCarthy to resign as Speaker of the House.

On the Democratic side, some are also skeptical. Congressman Ro Khanna of California said that several of his colleagues oppose the budget cuts and “they don’t know yetHow are they going to vote?

The bill suspends the debt ceiling until 2025, long enough to get through the next 2024 presidential election.

In exchange, some expenses are limited in order to keep them stable -except the military- in 2024 and limit their increase to 1% for 2025.

It also provides for a reduction of US$10 billion in funds allocated to the treasury to modernize and intensify controls.

McCarthy’s office further explained that the agreement provides for the recovery of “billions of dollars of unspent COVID funding” in the pandemic, without giving more details.

One of the points of contention includes modifications to the conditions to benefit from some social assistance, such as the increase in the working age from 49 to 54 years for adults without children who aspire to food assistance, but eliminates this requirement for veterans of war and homeless

Source: AFP