Biden finalizes debt ceiling deal with Congress to avoid catastrophic default

US President Joe Biden said yesterday, Sunday, that he had finalized a budget agreement with House Speaker Kevin McCarthy to suspend the government debt ceiling of $ 31.4 trillion until January 1, 2025, adding that the agreement was ready to be presented to Congress for a vote.

“This agreement is good news… for the American people,” Biden told reporters at the White House after a phone call with McCarthy to finalize a preliminary agreement reached on Saturday evening.

He added that the deal “takes the risk of catastrophic default off the table, and protects our hard-won historic economic recovery.”

The agreement, which prevented the US government from defaulting on its debts, which would have set a precedent in the country’s history, came after weeks of heated negotiations between Biden and the Republicans in the House of Representatives. The Congress, divided between Democrats and Republicans, must still be approved before June 5, when the US Treasury says it will be unable to find the money to cover all its obligations.

“I strongly urge both houses to approve this agreement,” Biden said, adding that he expects McCarthy to get the votes needed to approve it.

The agreement suspends the debt ceiling until January 1, 2025, sets a spending cap for the 2024 and 2025 budgets, and includes recovering unused funds earmarked to combat the coronavirus pandemic, accelerating licensing of some energy projects, and some additional work requirements for food aid programs for poor Americans.

According to the text of the agreement, the bill will allow more than $886 billion for security spending in fiscal year 2024 and more than $703 billion for non-security spending for the same year, without including some amendments. It also allows for a one percent increase in security spending in fiscal 2025.

Senate Republican Leader Mitch McConnell in a statement hailed the deal and called on the Senate to move quickly to pass it without undue delay, but members of the hardline House Republican Freedom Caucus said they would try to block approval of the deal in a vote expected on Wednesday.

“We’ll try,” Representative Chip Roy, a senior member of the caucus, said in a tweet on Sunday.

McCarthy dismissed the threats of opponents within his own party, saying that “more than 95 percent” of House Republicans are “very excited” about the deal.

House Democratic Leader Hakeem Jefferies said he expected Democrats to support the deal, but in an interview with CBS’ “Face the Nation” he declined to estimate how many members of his party would vote for the deal.