April 22, 2024

US President Joe Biden has said he is optimistic that a bipartisan deal to temporarily suspend the nation’s debt ceiling will pass through Congress.

The deal must pass in the narrowly divided House of Representatives before it is voted on in the Senate.

Democratic and Republican leaders say they expect it will be approved, but some lawmakers have said they will vote against it.

The US may default on its debt by 5 June without action being taken.

On Monday, Mr Biden said he felt “very good” about the prospect of lawmakers passing the deal by the deadline.

“We’ll see when the vote starts,” he told reporters as he left the White House, adding he had “made some calls already” to lawmakers.

Negotiators worked to sell the package on Monday, the Memorial Day federal holiday, with both parties holding separate calls and meetings on the bill, US media report.

The House and Senate are expected to return to the Capitol on Tuesday. A vote on the bill in the House of Representatives is scheduled for Wednesday, lawmakers said.

The proposed deal comes after long and bitter negotiations between Democrats and Republicans.

It includes suspending the debt ceiling until the first quarter of 2025, rather than raising it by a specific amount, as well as a cap on non-defence spending until 2024.

A text of the bill, titled the Fiscal Responsibility Act, was made public on Sunday.

 

That same day, Mr Biden told reporters that he did not believe his party had made too many concessions in the agreement.

“This is a deal that is good news,” Mr Biden said. “It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery.”

Hakeem Jeffries, the Democratic House minority leader, told CBS he believed his party would support it.

“I do expect that there will be Democratic support once we have the ability to actually be fully briefed by the White House,” Mr Jeffries said on Sunday. “But I’m not going to predict what those numbers may ultimately look like.”

But Ro Khanna, a Californian Democrat and member of the House Progressive Caucus, told NBC News on Sunday night that a “large majority” of House Democrats were “in flux” on whether they would lend their support.

Mr Biden said on Monday he did not know if progressive Democratic lawmakers would back the deal.

Meanwhile, House Speaker Kevin McCarthy said on Sunday that he expected more than 95% of House Republicans would support the bill.

In an opinion piece published in the Wall Street Journal late on Sunday, the top Republican hailed the agreement as a hard-fought win for Republicans.

“We are changing the direction in Washington through a responsible debt-limit increase that cuts spending, saves taxpayers money and restores economic growth,” he wrote.

During negotiations, Republicans had been seeking spending cuts in areas such as education and other social programmes in exchange for raising the $31.4tn (£25tn) debt limit.

As the 99-page proposed agreement was made public, some of the most conservative Republicans voiced concerns that the deal did not cut future spending enough. Republican Chip Roy of Texas said on Twitter that he and some others were going to try to stop it passing.

Some Democrats said they worried about changes in the agreement to the food stamps programme.

Aside from addressing the debt ceiling limit, the bill also proposed raising the age from 50 to 54 for those who are required to work in order to receive food benefits.

At the same time, it proposed eliminating work requirements for veterans and people who are homeless.

Republicans control the House by 222 to 213, while Democrats control the Senate by 51 to 49.

The Treasury had warned the US would run out of money if a deal was not passed.

The US must borrow money to fund the government because it spends more than it raises in taxes.

With the US dollar being the reserve currency of the world, a default would both upend the US economy and disrupt global markets.

 

 

Credit: Nadine Yousif
BBC News

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