June 24, 2024

America. Biden and McCarthy seal the loan deal

House Speaker Kevin McCarthy speaks at a press conference in Washington. Photo: Patrick Semansky/AP/dpa


US President Joe Biden and Republican Speaker Kevin McCarthy have sealed their compromise on a bill that would keep the US out of default. Earlier, only a “temporary agreement” was talked about. “Speaker McCarthy and I have reached a bipartisan budget agreement that will prevent the worst crisis — a first-time default in our nation’s history,” Biden said on Twitter on Sunday (local time).

Biden continued that the deal was “good news” for the American people. He called on Congress to immediately pass a deal to freeze the U.S. debt ceiling until 2025 in exchange for significant spending cuts. The assembly is scheduled to vote on Wednesday.

The bill must pass both houses of Congress – the House of Representatives and the Senate – and be signed by the President soon, so that the US government runs out of money. US Treasury Secretary Janet Yellen has warned that the money will run out on June 5. It was a heated controversy that prompted Biden to cancel foreign trips.

Biden and McCarthy hailed the compromise: an important step forward that protects important programs for working people and cuts spending while strengthening the economy for all, Biden announced Saturday. Additionally, the agreement protects the most important parts of his agenda. However, the 80-year-old admitted that “not everyone gets what they want”.

McCarthy spoke of a “deal the American people deserve.” On Fox News, he was optimistic: “I think the majority of Republicans will vote for this bill.” “So I think a lot of Democrats will vote for this,” President Biden is behind the speech.

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Approval is likely, but not guaranteed, in the House of Representatives on Wednesday. With the Republican Party holding a narrow majority, the situation in the chamber is chaotic. There are also radical MPs in the parliamentary group who are not interested in a realistic compromise. McCarthy was only elected president by his group earlier in the year after a historic election upset. This greatly weakened his position.

The debate over the debt ceiling is a major test for McCarthy in which he must deliver results for his party. He must succeed in rallying a handful of extremists behind the deal to secure the widest possible majority in his party. As his party colleagues oppose him, it will further weaken him, especially if he has to rely on a large number of votes from Democrats.

The compromise just reached was aimed at effectively freezing the size of the federal budget that Democrats under Biden actually wanted to increase. The budgets of many federal agencies and ministries will be adjusted for this. McCarthy talked about “historic spending cuts” that would not include any new taxes or government programs. Democrats actually wanted to increase state revenue by taxing the rich more. Republicans opposed it. During the negotiations, you urged Biden to save in social areas in exchange for increasing the debt ceiling.