Biden and Republicans reached an agreement to avoid default

The White House and representatives of Republicans in Congress reached an agreement in principle on raising the state debt ceiling and budget issues. This was announced on Saturday evening by both Republican House Speaker Kevin McCarthy and President Joe Biden.

Congress should have time to legislate the agreements reached next week. If the agreements were not reached, the USA would be threatened with default, which, according to experts, could affect the entire world economy. The head of the Federal Reserve System previously warned that the money in the federal treasury may run out by June 5.

According to Biden, it is a compromise in which “not everyone gets what they want.” At the same time, the president admitted that the agreements “will prevent a catastrophic default.” McCarthy called the agreement reached “a great victory.”

Republicans, who control the House of Representatives, in exchange for approval of the increase in the national debt ceiling, insisted on a sharp cut in budget expenditures. According to the media citing sources, the negotiators agreed to freeze budget expenditures not related to defense next year at the current level, and in 2025 to increase them by only 1%. Republicans previously demanded a reduction in budget expenditures, as well as a review of a number of social programs. According to Politico, this will not happen.

It is assumed that part of the right-wing Republicans will vote against the bill, but moderate Democrats, in turn, will support it. Thus, a two-party majority will be ensured for its adoption in the House of Representatives. Voting is expected to take place on Wednesday, May 31.