With time running out to prevent a government default, President Joe Biden and House Speaker Kevin McCarthy announced on Sunday that they had reached a final agreement to raise the nation’s debt ceiling.
The deal aims to gather support from the political middle as Congress races against a June 5 deadline to avoid a damaging federal default.
Biden expressed relief, stating, “The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history.” He called on both parties in Congress to unite for swift passage, emphasizing the bipartisan nature of the agreement.
Biden, McCarthy express confidence in debt deal
The final product of the deal includes spending cuts, although some lawmakers may be displeased with the concessions.
Nevertheless, Biden and McCarthy expressed confidence that the plan would pass through Congress.
McCarthy assured that people could work together to pass the agreement, while Biden stated he was confident in the plan’s chances.
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Debt default equals global economic crisis
The outcome of the upcoming days will determine whether the United States can narrowly avoid a default on its debt, potentially leading to a global economic crisis.
A default would have severe repercussions, freezing financial markets, causing millions of job losses, increasing borrowing and unemployment rates, and erasing trillion dollars in household wealth.
Balancing bipartisan demands in debt deal
The deal, while falling short of the sweeping spending cuts sought by Republicans, includes provisions important to influential Democratic Senator Joe Manchin.
It also incorporates Republican demands for increased work requirements for food stamp recipients, which Democrats had initially opposed.
Negotiators faced challenges in securing support from both parties.
Bipartisan support crucial in debt deal
The agreement was reached after weeks of negotiations and discussions between Biden and McCarthy.
Bipartisan support is crucial for its approval before the projected June 5 government default.
Lawmakers are set to return from the Memorial Day weekend, with the bill expected to be posted for review in the House as early as Wednesday.
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Breakdown of debt deal ‘package’
The package includes a two-year budget deal that maintains flat spending for 2024, increases defense and veterans’ funding, and limits increases to 1% for 2025.
It also suspends the debt limit until January 2025, pushing the issue beyond the next presidential election.
Republicans succeeded in imposing stricter work requirements on government aid recipients, with exemptions for veterans and homeless individuals.
The deal also introduces changes to the National Environmental Policy Act, streamlining the process by designating a single lead agency for environmental reviews.
McCarthy banks on Republicans’ support
The agreement is significant for McCarthy, who faces challenges within his party due to the slim Republican majority in the House.
Some hard-right conservatives may view the deal as insufficient in reducing spending, potentially causing division among Republicans.
However, McCarthy expressed optimism that most Republicans would support the bill, especially with Biden’s endorsement.
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Democrats give support to bipartisan solution
Democratic support is also crucial, and House Democratic leader Hakeem Jeffries expressed confidence in garnering enough votes.
A group of moderates in the New Democratic Coalition announced their support, stating that Biden and his team had delivered a viable, bipartisan solution.
The agreement alleviates pressure on Biden, who had faced criticism from progressives for yielding to what they viewed as Republican hostage-taking.
Nation’s economy hangs on Congress’s decision
However, some progressive members of Congress, such as Pramila Jayapal, raised concerns about whether caucus members would support the agreement.
In the coming days, Congress will decide whether to avert a potentially disastrous default, safeguarding the nation’s economy and providing stability amidst a politically divided landscape.
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