Will the debt-ceiling deal remain intact?

Will the debt-ceiling deal remain intact?

Can the debt-ceiling deal ⁤hold?

ANY JOURNALIST, save this one, could tell you: a little deadline pressure ⁢can be helpful. But this principle can,‌ like most,‍ be taken to insanity. Consider the pathological⁢ case ​of Congress under divided government, which often functions by wiring time bombs and sitting idly by ⁤until the countdown ticks close ‍to zero. The present ‍showdown over the‍ debt ceiling, a statutory limit on the amount of money the⁢ Treasury can ​borrow, illustrates this worryingly well.

After the federal⁤ government hit its limit of $31.4trn in ‌January, the Treasury entered into a number ​of ⁤“extraordinary measures” ​(which, despite the name, are now routine) meant to avoid a sovereign default. Republicans ​led ⁤by Kevin McCarthy (pictured), the speaker of the House of Representatives, promised to withhold the votes necessary to ⁣increase⁢ the limit unless the White House ⁣accepted‍ budgetary concessions. For months the position of President ‌Joe Biden was, in essence, to refuse to negotiate with ⁤economic terrorists. But as​ the “X-date”—the drop-dead day when the accounting tricks ran out—of‌ early June approached, Mr​ Biden began bartering. The two ​sides announced a compromise deal over the weekend,​ leaving just enough time for Congress to pass ⁢it. But it will still ‍take days of delicate ‍work before the ​bomb can be defused.

The trickiest moment is expected tonight, when Mr McCarthy brings the deal up for a vote in the‌ House. He ⁣faces a brewing ⁢rebellion‍ within his ⁣own caucus‍ of hardline members who believe that he scored an insufficiently favourable​ deal with the White House. Mr McCarthy ‍had a tortured route to power, ⁢having to endure ⁤a humiliating series of 15⁤ votes in January,‌ when hardliners⁢ demanded concessions in exchange for his accession. One of those ⁢concessions was a pledge to push an austere line in the debt-ceiling negotiations.

2023-05-31 07:13:05
Article from www.economist.com

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