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US President Joe Biden and House Representative Kevin McCarthy have reached a deal in principle to raise the government’s $3.4 trillion debt ceiling days before the default deadline.
The tentative agreement between the two parties would raise the debt limit for two years while limiting spending over that time. However, the deal still needs approval from a divided congress next week before the US government runs out of money to pay its debt on June 5.
Joe Biden calls debt ceiling agreement a “compromise”
US President Joe Biden described the tentative agreement as a “compromise”, while House Speaker Kevin McCarthy said it “has historic reductions in spending.” “The agreement represents a compromise, which means not everyone gets what they want,” Biden said in a statement late on Saturday. “That’s the responsibility of governing,” he added.
Biden called the debt ceiling agreement “good news for the American people because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.”
BBC reported that non-defence government spending would be kept flat for two years and then rise by 1% in 2025.
Final vote will be on 31st May
In his remarks at the Capitol, the Republican representative said that there is still a lot of work to be done but believes this is an agreement in principle that’s worthy of the American people. He added that he expects to finish writing the bill on Sunday, then speak to Biden and have a vote on the deal on Wednesday, 31st May. However, Biden and McCarthy both need to convince members of Congress in their own parties in favor of the deal reached before the vote this coming week.
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