A classic compromise, limited and imperfect. But a significant compromise that will allow the US to retreat from a financial abyss. That is the agreement in principle reached on Saturday, May 27, between the White House and the Republican negotiators in the House of Representatives, on the increase in the debt ceiling and the budget cuts imposed in exchange. This deal, which still needs to be voted on by the House on May 31 and then by the Senate before being signed by Joe Biden, represents the only possible way to avoid the federal government defaulting on its financial obligations (spending accounts and debt) at the beginning of June.
Unlike previous increases in the debt ceiling, this time the Republican majority in the House wanted to tie this measure to a limit on federal government spending. After refusing for a long time, Joe Biden had to accept the parameters of this negotiation. The increase in this spending will be frozen in 2024 and limited to 1% in 2025, except in the military sector. In turn, raising the debt ceiling over this two-year period would allow this issue to be removed from partisan confrontation before the November 2024 presidential election.
Several weeks of tense negotiations, interspersed with mutual accusations of extortion and irresponsibility, took place between the two parties. Excitement grew as the timetable seemed ever more restrictive before the US reached the debt ceiling set by Congress at $31.381 billion (about €29 trillion). To the point that some White House advisers were carefully studying the hypothesis of bypassing Congress and invoking the Fourteenth Amendment to the US Constitution. Adopted in 1868, it specifies that “the validity of the public debt […] will not be questioned”. But this use would inevitably have led to legal challenges.
Instead, Joe Biden and House “speaker” Kevin McCarthy (California) managed to advance against each other. In a statement on Saturday evening, the US President welcomed this agreement, “represents a compromise” And “good news for the American people as it prevents what could have been a disastrous default and led to an economic recession”. Joe Biden believes that the democratic priorities and the legislative texts that have already been voted for two years remain intact.
You have 63.64% of this article left to read. The following is for subscribers only.