UNITED STATES: While President Joe Biden and House Speaker Kevin McCarthy proceeded to protect trade budget-cutting ideas all through Tuesday’s debt ceiling agreements, there were few visible signs of growth. Republicans, nevertheless, warned that there was a “lack of urgency” at the White House to end the stalemate in a potentially disorderly federal default.
The White House continues to maintain that cutting tax breaks for rich individuals and some corporations can cut deficits, but McCarthy asserts he told the president in a meeting in February that raising taxes is not an option.
The duration of a prospective 1% cap on annual spending growth is also being debated by the negotiators, with Republicans reducing their demand for a 10-year cap to six years and the White House offering only one year, for 2025.
Press secretary Karine Jean-Pierre from the White House mentions that it is “ridiculous” to recommend Joe Biden’s incapacity to act immediately, highlighting, “He wants to see this done as soon as possible.”
As early as June 1, the Republican speaker and the Democratic president were experiencing a financial crisis with only one week remaining before a deadline.
An inability to reach a deal would be unprecedented, and it would unquestionably create disruption in the U.S. financial markets, hurting both domestic and international financial systems. With no memorandum of understanding in sight, markets declined on Tuesday.
The White House insisted from the beginning that it was unwilling to negotiate over the need to pay the nation’s debts and requested that Congress simply raise the debt ceiling, as it has done numerous times before with no conditions.
But the newly elected speaker urged the president to negotiate a budget plan that would cut spending to lower ballooning deficits in the post-COVID era in exchange for the permission of future debt at a February Oval Office meeting.
McCarthy confronts a pretty tough side of the field in his own party that is likely to reject any deal, which has led some Democrats to encourage Biden to reject any deal with the Republicans and simply invoke the 14th Amendment to raise the debt ceiling on his own, an unparalleled and risky legal manoeuvre the president has resisted for the time being.
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