Democrats and Republicans on Friday headed a deal ahead of a long weekend to extend the U.S. debt ceiling and avoid a devastating default that could hit the world’s largest economy within days. walked on.
As the Treasury Department’s estimated deadline for the government’s funding shortfall looms next Thursday, there is some optimism in Washington that the two nations will eventually compromise.
According to unconfirmed US media reports, this includes a deal to cover the US debt, which has reached $31 trillion and continues to grow, for two years, ensuring that the current drama will not be repeated before the 2024 presidential election. means.
To do this, Democrats would give in to Republican demands for drastic restrictions on spending on social security and other domestic programs.
There is increasing pressure to conclude some kind of deal and allow the government to borrow the additional funds needed to meet existing commitments.
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Government coffers could run out next Thursday, leaving some domestic bills and international creditors unpaid, the Treasury Department said.
A more optimistic assessment is that we are only weeks away from a catastrophe that will likely lead to a stock market plunge, huge job losses and an economic recession.
Members of Congress will leave Washington for a 10-day recess as the country celebrates Memorial Day on Monday. Even President Joe Biden – to the surprise of some in his party – is heading to his Camp David retreat and private residence in Delaware.
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But Deputy Treasury Secretary Wally Adeyemo told CNN that both Biden and Republican congressional leader Kevin McCarthy are focused on avoiding catastrophe.
“The president decided, the chair said, we have to do something by June,” Adiemo said. “The president is committed to negotiating in good faith with Republicans to reach an agreement because the alternative would be disastrous for all Americans.”
Biden also tried to reassure the country on Thursday that “a default will not happen.”
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A debt ceiling hike is an annual accounting game that usually passes with relatively little notice. It simply allows the government to continue borrowing money to pay bills already incurred through the budget.
This year, the increasingly far-right Republican Party decided to leverage the debt ceiling to push Mr. Biden down the Democratic Party’s priority spending agenda.
Republicans call this taking responsibility for the $31 trillion national debt. The White House has accused the opposition that controls the House of Representatives of holding the economy hostage.
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Democratic minority leader Hakeem Jeffries denounced Republicans on the House floor Thursday, accusing them of being at risk of a “dangerous default in a self-inflicted crisis.”
Economists have spent months raising the likelihood of economic catastrophe should the government default on its debts, but senior military officials added their dire predictions on Thursday, saying that the crisis could threaten the military. warned that it would have a “significant adverse effect” on
“There will obviously be an impact on readiness, so the large scale training we’re doing at various training centers is probably slowing down a lot of the time,” Joint Chiefs of Staff Chairman Mark Milley told reporters. will be stopped,” he said. .
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Lawmakers are home for a 10-day recess, but McCarthy said lawmakers will be notified 24 hours in advance if they need to return to vote during the recess.
McCarthy said a CNN poll this week showed 60% support for raising the debt ceiling with cuts, while 51% of respondents in a new Monmouth University survey said they had two issues. He pointed out that they had answered that they wanted them to be separated.
“We are aware of where we differ and will continue to work together to resolve this issue,” McCarthy said.
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