June 12, 2024

Athens News

News in English from Greece

USA: end of the political stalemate of recent months

The White House and the Republicans, after several weeks of fierce negotiations, agreed to raise the US debt ceiling and prevent a default.

According to US President Joe Biden, Democrats and Republicans agree in principle to the deal. He called the agreement a “compromise” and Speaker of the House Kevin McCarthy said it “has a historic cost cut.” The deal must be approved by the US Congress, notes Air Force. This is expected to happen on Wednesday May 31st.

The announcement of the deal was made by Republican Speaker of the House Kevin McCarthy on Saturday evening (early Greek time this morning), who said he was “satisfied” with the result and tweeted:

“I just got off the phone with the President. After he spent months refusing to negotiate, we reached an agreement worthy of the American people in principle. It has historic spending cuts, consistent reforms that will lift people out of poverty into a workforce, curb government abuses, no new taxes, no new government programs, there’s a lot more in the bill.”

Details of the new deal have not been officially released, but CBS, the BBC’s U.S. partner, said non-defense government spending would remain flat for two years before rising by 1% in 2025.

According to CBS, there will be no major changes in Medicaid health insurance. According to the report, it was unclear exactly how the government program, which provides assistance with buying food for people with low or no income, will change.

In a brief press conference late Saturday night, McCarthy said he planned to finish writing the bill on Sunday and speak with President Biden again later that day before holding a congressional vote on Wednesday.

Biden spoke of a “significant step forward” while pointing out that the agreement was dictated by his “responsibility” for “management.” In his statement, the President of the United States said:

“The agreement is a compromise, which means that not everyone gets what they want. This is the responsibility of the government. And this agreement is good news for the American people because it prevents what could be a catastrophic default and lead to an economic recession, emptying retirement accounts and losing millions of jobs.”

According to the Reuters news agency, the agreement will raise the debt limit ($31.4 trillion, a world record) for two years, while at the same time providing limits on government spending, excluding spending on the military and veterans, and, apparently, will satisfy some demands put forward by the Republicans, writes CNN Greece.

Both Biden and McCarthy will have to convince members of Congress from their respective parties that the deal is a good one before next week’s vote. The US Treasury Department had previously warned that without a deal, the country would run out of money to pay its bills on June 5. Such a default would overturn the US economy and disrupt global markets.

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