The White House and the Republicans agreed in principle, days before the country’s cash shortages were exhausted, as the measures taken to limit the debt limit in the United States.
In his written statement, Biden stated that they reached a debt limit agreement in principle with Speaker of the House of Representatives McCarthy this evening.
President Biden said the deal is an important step that cuts spending while protecting critical programs for employees and growing the economy for everyone.
“Avoids a situation that could lead to a catastrophic default“
Pointing to the fact that the deal maintains the basic priorities of himself and the Democrats, Biden said that the agreement represents a compromise, which means that not everyone gets what they want.
Noting that the deal is good news for the American people, Biden said, “Because it prevents a situation that could lead to a catastrophic default, an economic recession, the collapse of retirement accounts and the loss of millions of jobs.” made its assessment.
Informing that the negotiating teams will put the legislative text in writing and the agreement will go to the House of Representatives and the Senate, Biden called for the agreement to be passed immediately.
“I believe this is a deal worthy of the American people”
At the press conference on the subject, McCarthy stated that he had two phone conversations with US President Joe Biden today and said, “After weeks of negotiations, we reached an agreement in principle. We still have a lot of work to do, but I believe this is an agreement worthy of the American people.” he said.
Stating that the agreement includes historical decreases in expenditures and important reforms that will move people from poverty to the workforce, McCarthy said that new taxes and government programs are not in the agreement.
Pointing out that there is much more to the agreement bill, McCarthy said that he has work to do today to put it into writing.
McCarthy thanked the Republican representatives Garret Graves and Patrick McHenry, who participated in the budget limit negotiations, for their work, and said that he would inform the members about the current situation.
McCarthy stated that he will speak with President Biden again tomorrow afternoon after the drafting of the bill is finished and after his meeting with the White House, he noted that he hopes to publish the text tomorrow and put it to a vote on Wednesday.
Debt limit is expected to be increased for 2 years
According to the news in the US press, the debt limit is expected to be increased for 2 years as part of the agreement reached after long negotiations between the White House and the Republicans.
The agreement, which aims to cut spending on some federal programs, is expected to introduce new work requirements for some state aid beneficiaries, including food aid programs.
The agreement envisions new limits on how long certain food voucher buyers under the age of 54 can benefit from the program. On the other hand, it is planned to expand access to food vouchers for veterans and homeless people.
Within the scope of the agreement in question, it is aimed to recover the aid money provided during the epidemic but not spent.
It is stated that the agreement will limit discretionary spending for two years, but that these limits will be applied to defense spending differently from the rest of the federal budget.
The bill, which envisages increasing the debt limit in line with the agreement, is expected to be voted on in Congress within a few days.
Yellen warned that if the debt limit is not increased, there may be a cash shortage as of June 5th.
The US reached the debt limit of 31.4 trillion dollars on January 19, and the US Treasury began to take extraordinary measures to avoid exceeding the limit.
The Treasury Department warned that these extraordinary measures could be exhausted by the beginning of June.
In a letter to the Speaker of the House of Representatives, Kevin McCarthy, on Friday, Secretary of the Treasury Janet Yellen predicted that the Treasury would not be able to meet its obligations unless Congress raises or suspends the debt limit by June 5, based on available data. had reported.
The cash level of the U.S. Treasury fell to $38.8 billion as of May 25, the lowest level since 2017 as debt limit negotiations continued.