WASHINGTON: US President Joe Biden and the Republicans have agreed in principle to increase America’s debt ceiling and prevent a default, US House Speaker Kevin McCarthy said on Sunday. However, no details of the agreement have so far been issued.
BBC reported that the US Treasury Department earlier warned that the nation would run out of money to pay its bills on 5th June without an agreement. Such a situation would upset the country’s economy and also disrupt international markets.
White House, Republicans Reach Deal to Avert Debt Default
The reported agreement comes shortly after Biden and Kevin McCarthy discussed the matter on the phone. They earlier said they were confident an agreement would be reached.
McCarthy tweeted: “After President Joe Biden wasted time and declined to negotiate for several months, we have come to a deal in principle that is worthy of the US citizens.
I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we've come to an agreement in principle that is worthy of the American people.
I'll deliver a statement at 9:10pm ET. Watch here:https://t.co/vmn31INPH5
— Kevin McCarthy (@SpeakerMcCarthy) May 28, 2023
Republicans are poised to deliver big, consequential change in Washington. Soon, we will vote for a responsible debt limit agreement that stops Democrats' reckless spending, claws back unspent COVID funds, blocks Biden's new tax schemes, & much, much more https://t.co/TQ7CblFsaM
— Kevin McCarthy (@SpeakerMcCarthy) May 28, 2023
The United States must borrow money to provide funds to the government as it spends more than it raises in taxes. Republicans and McCarthy have been seeking spending cuts in education and social programmes in exchange for increasing the $31.4tn debt limit, a law which covers how much debt the government of the US can accumulate.
Republicans and Kevin McCarthy have said they will not increase the debt ceiling unless the White House decreases its spending in the years ahead. However, Democrats and Biden have countered with suggestions to increase certain taxes. Any agreement reached would require to be approved in a divided US Congress.
