US Debt Ceiling Crisis: President Biden & McCarthy announce ‘Agreement In Principle’ to raise debt ceiling

President Joe Biden and House Speaker Kevin McCarthy have declared a ” agreement in principle” to increase the country’s debt ceiling.

President Joe Biden and House Speaker Kevin McCarthy have declared a ” agreement in principle” to increase the country’s debt ceiling and prevent a potentially disastrous default after weeks of discussions.

The agreement contains the budget cuts Republicans requested, but it falls short of the cuts in the comprehensive measure enacted by the Republican-led House last month.

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The proposal contains a two-year budget agreement that would set spending caps for 2025 and maintain spending level for 2024 in order to decrease spending, as Republicans had argued. In exchange, the debt ceiling will be raised for the next two years, or until the conclusion of the next election.

Additionally, it increases some of the labour requirements for those who get food stamps and modifies an environmental legislation to try to speed up the approval process for new energy projects.

If lawmakers do not move swiftly to raise the federal debt ceiling, the United States may default on its financial commitments by June 5 according to Treasury Secretary Janet Yellen.

As Congress races to pass a deal, consider what comes next:

THE DEAL’S FINALISATION 

McCarthy claimed the plan features “historic spending reductions, consequential reforms that will lift people out of poverty into the workforce, and rein in government overreach” when speaking to reporters in the Capitol late on Saturday. Both new levies and new government initiatives are nonexistent.

In spite of this, he said, “we still have more work to do tonight to finish all the writing of it.” As midnight drew near, the speaker and his main negotiators were still sequestered in his office.

McCarthy promised to talk with Biden once again on Sunday.

In a statement, Biden said that “during the course of the next day, our negotiation teams will complete the legislative text and submit the accord to the United States House and Senate. I implore the two chambers to pass the accord immediately.

The deal is “an important step forward that reduces spending while protecting critical programmes for working people and growing the economy for everyone,” according to Biden.

SELLING THE CHECK 

McCarthy and Biden will now need to convince their respective parties to support the legislation in order for it to become law. They must make sure that the agreement is popular enough to pass both chambers without a mutiny on either side, even if both parties are projected to lose some votes.

In keeping with his pledge to present the deal to them before making the legislation public, McCarthy conducted a conference call with the Republican caucus on Saturday night. He stated that he intends to officially reveal the bill’s text Sunday afternoon.

There was a range of responses. Rep. Dan Bishop of North Carolina tweeted a puke emoji in protest at several Republicans on the call congratulating the speaker for receiving what he claimed was “almost zippo in exchange” for the debt ceiling increase.

While acknowledging they would lose some votes, McCarthy ally and South Dakota Representative Dusty Johnson claimed the plan had the “incredibly supportive” backing of the individuals he spoke with.

An assistant for House Democrats has confirmed that White House officials will brief their own group of lawmakers on Sunday at 5 p.m.

RETURN OF CONGRESS 

After Memorial Day on Tuesday, the House and Senate are anticipated to reconvene. To move the bill to the Senate, the House will vote on it on Wednesday, according to McCarthy.

If any senators attempt to stall the measure, maybe with amendment votes, until it reaches the Senate, where Democrats control a majority, it will have a significant impact on how quickly things go. This can prevent the law from passing for a few days.

Even yet, when all 100 senators are in agreement, the Senate may act rapidly. By the end of the week, the bill might be enacted and signed into law by Vice President Biden.

The possible crisis should be addressed by June 5, when the Treasury Department estimates the United States would be at risk of default, if all goes according to McCarthy’s plan and both houses are able to enact the measure.

The deal, according to Biden, “is good news for the American people because it prevents what could have been a catastrophic default and would have led to an economic recession, devastated retirement accounts, and millions of jobs lost.” Biden made the remarks in a statement on Saturday night.