The Democratic president added that the bill represents “a compromise that means no one is going to get what they want.” But he stressed that the deal “prevents what could have been a catastrophic default leading to economic recession, the destruction of pension accounts and the loss of millions of jobs”.
US President Joe Biden and Republican House Speaker Kevin McCarthy announced an agreement to raise the debt ceiling to ward off the specter of a US default, which was just days away.
The Republican-controlled House of Representatives will vote on the deal on Wednesday, according to McCarthy, and the Senate will submit it later.
McCarthy said in a brief speech that the budget settlement, the details of which he did not disclose, “is worthy of the American people.”
The conservative official welcomed the “unprecedented cuts” in public spending that were stipulated in the agreement and which constituted the main demand of the Republicans.
And without the raising of that cap, the world’s largest economy would have faced the possibility of a default on June 5, which would leave it unable to pay its wage and pension contributions to repay its debts.
Like major world economies, the United States depends on borrowing.
But unlike other developing countries, the United States regularly faces a legal hurdle in the form of the debt ceiling, the maximum level of debt that US authorities must raise in Congress.
Republicans, who have held a majority in the House of Representatives since January, are turning this legislative routine into a tool of political pressure.
Republicans refused what they called a “blank check” for the Democratic president, and stipulated that raising the cap currently set at $31.4 trillion required budget cuts.
Biden, who is seeking a second term in 2024, has long refused to negotiate with them, accusing the opposition of holding the US economy “hostage” by demanding the cuts.
The initial agreement reached on Saturday is a breakthrough for the financial markets, which did not experience panic following this issue, but their patience was at an end.
Often, last minute settlements are reached in cases such as this.
The rating agency “Fitch” had put the American rating “AAA” under surveillance, believing that the absence of an agreement “would send a negative signal in terms of governance”.
International Monetary Fund Managing Director Kristalina Georgieva said the global economy, which is mostly suffering from “great uncertainty”, is “indispensable” for these tense deliberations.
Read the Latest World News Today on The Eastern Herald.
