News]BIDEN AND REPUBLICANS REACH LAST-MINUTE DEBT CEILING DEAL TO AVOID "CATASTROPHIC DEFAULT"

[FRIDAY THE 13]

Congress will vote on the deal to extend the government's borrowing authority on Wednesday, just shy of the June 5 "X-date" when the Treasury estimates the government will no longer be able to pay its bills, plunging the world's biggest economy into turmoil.

Biden said in a statement that the deal was "good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost."

McCarthy, who spoke with Biden on Saturday to close the deal, said there was still "a lot of work to do, but I believe this is an agreement in principle that's worthy of the American people."

Raising the debt ceiling – a legal maneuver that takes place most years without drama – allows the government to keep borrowing money and remain solvent.

This year, Republicans demanded deep spending cuts – largely in social spending for the poor – in return for raising the debt ceiling, saying the time had come for bitter medicine to address the country's mammoth $31 trillion debt.

Biden argued that he would not negotiate over spending issues as a condition for raising the debt ceiling, accusing the Republicans of taking the economy hostage.

According to a source familiar with the negotiations, the deal includes freeing up the debt ceiling for two years, meaning there will be no need for negotiations in 2024, when the presidential election will be in full swing.

According to a source familiar with the negotiations, the deal includes freeing up the debt ceiling for two years, meaning there will be no need for negotiations in 2024, when the presidential election will be in full swing.

There will also be new rules for accessing certain federal assistance programs, though the source said the deal protected Biden's signature Inflation Reduction Act and student debt relief plan.

Biden said "the agreement represents a compromise, which means not everyone gets what they want. That's the responsibility of governing."

Biden called the agreement "an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone."

 

https://www.tag24.com/politics/us-politics/biden-and-republicans-reach-debt-ceiling-compromise-deal-to-avoid-catastrophic-default-2847413