Republicans and Democrats reach an “agreement in principle” to avoid suspension of payments

The country reached its legal debt limit of 31.4 trillion dollars on January 19

american president Joe Biden and the speaker of the House of Representatives, kevin mccarthyconfirmed that the White House and the republicans have come to aprinciple of agreement” to increase the ceiling of debt and prevent the entry of the country into suspension of payments.

“I just got off the phone with him. president. After you fooled around and refused to negotiate for months, we have come to a principle of agreement. agreement what is worthy of the American people,” McCarthy said in a message on social media.

Minutes later, in a brief appearance before the press, the republican assured that the agreement includes a “historical” reduction of public spending and reforms that will “take people out of the poverty and incorporate them by force labor“.

He also stressed that does not contain new taxes No new government programs.

“We still have a lot of work what to do tonight to finish all the text” of the agreement, warned the leader of the Republicans in Congress, who did not want to answer questions from the press because he first wanted to tell the legislators of his party the details of the preliminary agreement, cont.

McCarthy He explained that the legislators will continue with the drafting of the bill tonight. After this, he will consult with the White House, speak with Biden “tomorrow afternoon” before publishing the text, which I will vote on Wednesday the 31st.

An hour after the appearance of McCarthy, President Biden He published a statement in which he recognized that the principle of agreement contains concessions from the Democrats, but maintains the “key priorities” of his Government.

“The agreement represents a commitment, which means that not everyone gets what they want. That is the responsibility to govern,” he said.

However, he added, the deal”protects” its “key priorities” and “legislative achievements of the democrats congressional”.

“It is an important step forward that reduce spending while protecting critical worker programs and making grow the economy for everyone,” Biden added.

The president confirmed that the negotiation teams of both parties have the task of finish the legislative text, which will be voted on both in the house of representatives (controlled by Republicans) as in the Senate (controlled by Democrats). “I strongly urge both houses to approve the agreement immediately,” he concluded.

The preliminary agreement comes one day after the Secretary of the Treasury, Janet Yellenwill update to June 5 its estimate of the deadline after which the country could see itself headed for suspension of payments.

He debt limit is the total amount of money that the Government of the United States is authorized to borrow to comply with its existing legal obligations and to be able pay Social Security and Medicare benefits, military wages, interest on debt national, refunds of taxes and other payments.

From time to time, the United States looks at the non-payment of the national debt because, unlike other countries, the Government can only issue debt up to the limit established by Congresswho has the power to raise that ceiling as he sees fit.

The country reached the past January 19 its legal debt limit of $31.4 trillionwhich led the Treasury Department to resort since then to measures extraordinary to pay the bills.

When the agreement is finalized and approved in the chambers, a period of strong confrontation between Democrats and Republicans, who had been trying for months without success approach positions on this issue.

Biden has shown himself these months cutting to make concessions by accusing “the MAGA Republicans in Congress,” in reference to the legislators more radicals of the party that follows the former president donald trump (2017-2021), of threatening the progress of the country with demands “completely” unacceptable.

However, the negotiations intensified in recent weeks, with the deadline approaching, an urgency that led President Biden to return before his trip to Japan to the G7 summit.

Institutions like the Federal Reserve (Fed) have alerted these months about the risks not to raise the debt ceiling. Not doing so, its president recently warned, Jerome Powell“would be unprecedented” and “we would be in uncharted territory” whose consequences “would be highly uncertain.”

Also international organizations such as the International Monetary Fund (IMF) have been warning about the urgent need for Congress to act since, if it does not, there will be “serious repercussions“both for the US economy and globally global.

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