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Friday, September 22, 2023


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Government and PoliticsWhere have the US debt ceiling negotiations gone?

Where have the US debt ceiling negotiations gone?

President Joe Biden sounded “pretty hopeful” on Friday afternoon and said he was hopeful “by tonight we can see if we can get a deal done.”

Ahead of Biden’s remarks, a source familiar with the talks said: ‘We are closer (to a deal), but that hasn’t happened yet,’ questioning the possibility of announcing a deal on the same day , according to an AFP report.

For his part, Republican House Speaker Kevin McCarthy, one of the heroes of this financial policy series, spoke of progress. But he said, “Nothing is certain until everything is agreed,” in an effort to keep the pressure on the president.

There is no shortage of pressure on this difficult to understand issue outside the United States and more generally outside the Washington bubble.

A major sticking point has been Republicans’ insistence that those who receive government assistance, such as food aid, must work for it.

White House spokesman Andrew Bates said Republicans are prepared to jeopardize “more than eight million jobs if they can’t get bread out of the mouths of starving Americans.”

At the same time, the date on which the US Treasury will find itself unable to meet its financial obligations has been revised to June 5 from June 1, which provides for a longer time frame.


“Based on the latest data available, we now estimate that the Treasury Department will not have sufficient resources to meet the government’s obligations if Congress does not raise or suspend the debt ceiling by June 5. “U.S. Treasury Secretary Janet Yellen said in a letter to members. of Congress on Friday.

And she added that more than 130 billion dollars allocated to pensions and health, especially for veterans, must be paid in the first two days of June, explaining that this “will make the amount of treasury resources very small”.

The challenge is to get Congress to vote quickly, both the Republican House and the Democratic Senate, on raising the public debt ceiling, failing which the United States risks being in a state of default, an unprecedented situation in the potentially catastrophic economic, financial and social repercussions. .

This parliamentary maneuver has always been a bipartisan formality. But this time, the Republicans demand, in exchange for their agreement to raise the debt ceiling, a reduction in public spending.

Officially, Joe Biden refuses to negotiate this, pointing out that he is a “hostage”.

But in reality, advisers from both sides have been talking nonstop for days, according to US media, and have agreed on some broad outlines.

The New York Times and the Washington Post reported, for example, that the agreement would freeze certain expenditures, but without prejudice to the budgets allocated to defense and veterans.

A two-year period will be authorized, until after the next presidential election, under penalty of default.

reduce debt

Each side wants to limit the damage at the political level.

And Kevin McCarthy, who needs to strengthen his position as Speaker of the House of Representatives, can say he has tightened the budget, while Democrats can say they have protected social privileges and big investment projects. .

Biden, who is seeking a second presidential term, said on Thursday the talks were taking place between “two conflicting visions.”

He presented himself as a champion of social and financial justice. However, the media reported that Biden (80) had waived in these negotiations any increase in the means allocated to the fight against tax evasion.

And if an agreement is reached, it is supposed to be approved by the Senate, where the Democrats have a slim majority, and the House of Representatives, where the Conservatives have a fragile majority.

But the Congress program is compressed. Several of its members have returned to their strongholds, where they will spend a long weekend on Remembrance Day.

On the other hand, some progressives within the Democratic Party and some parliamentarians from the Republican Party have threatened not to ratify a text – or to delay it as long as possible – comprising exaggerated concessions to the opposition camp.

Kristalina Georgieva, managing director of the International Monetary Fund, said Friday that finding a solution is “crucial” for the global economy, stressing that the United States must do “more to reduce public debt”.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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