A race against time to save the US debt ceiling

A negotiating frenzy broke out in Washington on Monday, a US holiday, as the White House and Republican leaders sought on Capitol Hill to build a consensus strong enough to prevent the country from defaulting on its public debt and triggering a global recession.

On Saturday, President Joe Biden and House Republican Leader Kevin McCarthy reached a tentative agreement on which debt must now be put to a vote on Capitol Hill before the public debt limit expires on April 5 or around June 5.

This new agreement, which has yet to be ratified, suspends said limit until January 2025, after the next presidential election.

However, the more extreme wings of both sides are reluctant to support the agreement, believing that it includes too many concessions. Currently, the Democrats control the Senate and the Republicans the House of Representatives, in both cases with very close majorities.

The first big challenge will come Tuesday at the House Bylaws Committee, which kicks off the parliamentary process. This committee is dominated by three die-hard Republicans who are critical of McCarthy, their party’s leader: Ralph Norman From South Carolina Chip Roy from Texas and Thomas Massey from Kentucky.

The bill must bypass the Senate, where any senator can block progress for several days, thus past the June 5 deadline. However, the leaders of both parties in the Senate, Republican Mitch McConnell and Democrat Chuck Schumer, support the agreement and believe the process there could be relatively quick.

McCarthy: “I will not give up”

Biden is likely to save the deal in the House of Representatives with the support of at least a hundred Democrats, as McCarthy has been in limbo since his election in January and had to submit his candidacy for Speaker of the House to the 15th vote due to the refusal of the hard-line wing of his party to endorse him.

See also  The Italian left elects for the first time a woman, Ethel Schlein, as leader of the PD

On Sunday, McCarthy jokingly referred to those losses. “One thing they’ve already learned about me is that I don’t give up. No matter how many times it takes,” he told reporters on Capitol Hill.

And the president sought to pressure his party by making remarks about the deal from the White House during this Memorial Day bridge. “This is a compromise, which means that no one got everything they wanted, but this is part of the responsibility of the government,” the president said.

McCarthy told the House Republicans that the Democrats were getting nothing in the negotiations to win their support. “It is true that this deal does not deliver everything that we all wanted,” McCarthy told reporters on Capitol Hill on Sunday. “But in a divided government, that’s how we end up. I think it’s a very positive bill.”

Stable defense spending

If McCarthy can go through with the deal, it will undoubtedly be his biggest success yet. By bargaining with Biden, he managed to keep non-defense spending broadly flat in fiscal 2024 and increase it by just 1% the following year.

The legislation aims to limit federal budget growth to 1% over the next six years. Overall, the White House estimates the plan will cut government spending by at least $1 trillion, though official estimates have yet to be released.

In addition, the agreement would eliminate nearly $30 billion in unused coronavirus relief funds approved by Capitol in previous bills.

The bill eliminates funding for the Internal Revenue Service (IRS) by repeal $1.4 billion. The measure has been widely criticized by Democrats, with many arguing it could weaken IRS efforts to combat tax fraud and tax evasion. However, supporters of the bill argue that the cut is necessary as part of spending cuts and an overall restructuring of the federal budget.

See also  The best way to save bananas

The debt ceiling is the legal limit to the amount of debt that the US federal government can issue to finance itself. It was established by law in 1974 and has been amended periodically since then. Currently, the US debt limit is $31.4 trillion (€28.5 trillion at current exchange rates).

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button