The breakthrough is a relief: the consequences of a debt default, the first in America’s modern history, would be dire
, politics-as-usual sometimes works. America has a history of debt-ceiling drama, staring into the abyss of a government default before reaching a deal at the last minute. This time, too, the familiar pattern has repeated itself. Intense negotiations went down to the wire. But President Joe Biden and Kevin McCarthy, the Republican speaker of the House of Representatives, resolved the final points of an agreement in a phone call on the evening of May 27th.
Yet the looming deadline concentrated minds as usual. The “X-date”, when the country might be unable to pay its bills unless Congress raised or suspended the debt ceiling of $31.4trn, was fast approaching. Although Janet Yellen, the treasury secretary, had on May 26th moved back her estimate of the X-date from June 1st to June 5th, time was running short to reach a deal and get it through both chambers of Congress.
Details of the deal were due to be released on May 28th. It reportedly includes new work requirements and time limits for some people on food stamps and some other safety-net programmes . Among the more contentious spending cuts, the Internal Revenue Service will get $10bn less than previously planned to enforce tax-collection.
A measure of that compromise is that it has already produced noisy disgruntlement among radicals on both sides. For the Republicans, the House Freedom Caucus is said to be exploring ways pushing to make the bill more radical. On the Democratic side, progressives are complaining that it goes too far.
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