Late on Saturday, negotiators from the White House and the Republican Party reached a provisional agreement to raise the US debt ceiling and avert a potential default that would have shaken the global economy. During a 90-minute phone discussion, President Joe Biden and House Speaker Kevin McCarthy finalized the agreement.
McCarthy stated that he will speak with Biden once more on Sunday and schedule a vote on the bill for Wednesday. Earlier, Treasury Secretary Janet Yellen issued a warning that a decision on an extension needed to be made by June 5 in order to prevent a historic default that would drive up borrowing costs.
According to reports, the agreement includes a two-year raise in the debt ceiling and a two-year appropriations pact that maintains non-defense expenditure at about current levels.
In response to growing worries that the US will tip over the edge, Fitch Ratings placed the US’s AAA credit rating on watch on May 24.
Here’s the statement from President Joe Biden on Bipartisan Budget Agreement in Principle, as released by the While House.
Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle.
It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. And, the agreement protects my and Congressional Democrats’ key priorities and legislative accomplishments.
The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.
And, this agreement is 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.
Over the next day, our negotiating teams will finalize legislative text and the agreement will go to the United States House and Senate. I strongly urge both chambers to pass the agreement right away.