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US President Joe Biden
US President Joe Biden and House Republican Speaker Kevin McCarthy reached, on May 27, an “agreement in principle” on a deal to raise the debt ceiling and cap federal spending, moving the nation one step back from the brink of a historic default.
The deal still needs to receive approval from the divided Congress, according to an official statement.
The deal — which will raise the federal debt limit in exchange for cuts to spending — was described by Biden as a “compromise”, while McCarthy said it “was worthy of the American people.”
McCarthy added that he will hold further talks on the final agreement with the US President today, May 28, planning to finish writing the bill later in the day before having a vote in Congress on May 31.
Similar to the world's major economies, the US relies on borrowing to cover a large part of capital expenditures. But unlike other developing countries, it regularly faces a legal obstacle represented by the debt ceiling, which is the maximum level of US debt that Congress should raise.
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