A few days before the deadline, US President Joe Biden and Republican leader Kevin McCarthy found Saturday an "agreement in principle" to avoid a default of payment of the United States, which will however still have to be validated by Congress. The Republican-majority House of Representatives will vote on Wednesday, his boss said. Then comes the Senate, with a Democratic majority.
Kevin McCarthy said in a short speech that the budget compromise found, which he did not give the details, was "quite worthy of the American people". The conservative leader only welcomed the "historic cuts" in public spending that he said the agreement provides, which was the main demand of the Republicans.
This agreement is a compromise, which means that everyone does not get everything he wants, "responded for his part Joe Biden, ensuring that the text "reduces spending while protecting essential public programs". The Democratic president said the deal with conservatives was "good news, because it avoids what would have been a catastrophic default."
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An agreement for a period of two years
Kevin McCarthy said he would meet again on Sunday with Joe Biden and publish the text on the same day, the result of difficult negotiations. According to several American media, the agreement reached between the executive and the opposition raises for two years, so until after the presidential election of 2024, the public debt ceiling of the United States.
Without raising this limit, the world's leading power risked defaulting on June 5, unable to honor its financial commitments: salaries, pensions or repayments to its creditors. Like almost all major economies, the United States lives on credit. But unlike other developed countries, America regularly comes up against a legal constraint: the debt ceiling, the maximum amount of debt of the United States, which must be formally raised by Congress.
From this routine legislative procedure, the Republicans, who have held the majority in the House of Representatives since January, have turned into an instrument of political pressure. Refusing to give a "blank check" to the Democratic president, they conditioned any increase in this ceiling, currently set at $ 31.400 trillion, to budget cuts. Joe Biden, a candidate for re-election, has long refused to come to the negotiating table, accusing the opposition of holding the US economy "hostage" by demanding such cuts.
Congress vote not yet assured
After several meetings at the White House between the two men, the teams of the president and the Republican "speaker" finally got down to endless negotiation sessions - all extensively commented by all Washington. The agreement in principle reached on Saturday night gives some air to the financial markets, which have never really panicked but that this paralysis was beginning to impatient. It is indeed very common for last-minute compromises to be reached on this type of dossier.