US President Joe Biden and Republican Congressman Kevin McCarthy have reached an agreement in principle on the thorny debt issue, according to the Republican leader, a crucial step to avoid a default by the first power. global economy.
This compromise, the result of very acrimonious negotiations, must be approved urgently by Congress.
The United States could otherwise find themselves as of June 5 in default of payment, that is to say unable to honor their financial commitments, whether they are salaries, pensions or reimbursements to their creditors.
No details were delivered on the content of the agreement, but the Republican leader was to speak to the press in the evening.
“Blank Check”
Like almost all major economies, the United States lives on credit.
But unlike other developed countries, America regularly comes up against a legal constraint: the debt ceiling, the maximum amount of indebtedness of the United States, which must be formally raised by Congress.
From this routine legislative procedure, the Republicans, in the majority in the House of Representatives since January, have made an instrument of political pressure.
Refusing to make a so-called “blank check” to the Democratic president, they have made any increase in this ceiling, currently set at 31.4 trillion dollars, conditional on budget cuts.
And placed in Kevin McCarthy, who poses as an uncompromising defender of budgetary rigor, the responsibility of negotiating with the octogenarian president.
Re-election candidate Joe Biden has long refused to come to the negotiating table, accusing the opposition of holding the US economy “hostage” by demanding such cuts.
After several meetings at the White House between the two men, the teams of the president and the ” speaker Republican eventually got down to endless negotiating sessions — all amply commented on by the whole of Washington.
The agreement in principle reached on Saturday evening gives a little air to the American markets, which were beginning to see this paralysis in the American capital with a bad eye. The rating agency Fitch had placed the AAA rating of the United States “under surveillance” on Thursday, estimating that the failure to reach an agreement “would constitute a negative sign in terms of governance”.
The world economy, already in the grip of “high uncertainty”, could have “did without” these tense negotiations, had also criticized the director of the International Monetary Fund, Kristalina Georgieva.
Emergency return to Washington
Still, this compromise must now be validated by the Senate, narrowly controlled by the Democrats, and by the House of Representatives, on which the Conservatives have a fragile majority.
The parliamentary calendar is constrained: many elected officials have returned to their homes across the United States for a break of several days, on the occasion of the long weekend of “Memorial Day”. They are instructed to be ready to return to Washington urgently.
In addition, some progressives within the Democratic Party, as well as elected representatives from the Republican Party, have threatened not to ratify, or to delay as much as possible a text that would make too many concessions to the opposing camp.
It is in fact very common for last-minute compromises to be reached on this type of file.