A tentative agreement in principle to raise the US debt ceiling was reached on Saturday between the US President Joe Biden and House of Representatives Speaker Kevin McCarthy.
The compromise deal that will keep spending flat for 2024 and impose limits for 2025 in exchange for raising the debt limit for two years until the next election is an important step forward and prevents what would have been a catastrophic default, Biden said in a statement.
But the coming days will be a further test for both Biden and McCarthy, both of whom must rally enough support for the agreement within their respective parties to ensure it passes through the House and Senate when it goes to the vote.
If failing to do so would roil the US economy and threaten millions of US citizens' financial security. Even if the deal goes through, the US people should now be in no doubt that their politicians are ready to hijack the entire nation for their own partisan interests.
The US would be greatly embrassing due to its debt obligations, which could result in a significant embarrassment for the nation. It is an extraordinary scenario that the rest of the world is questioning whether the United States will pay its debts and defaulting on its debt obligations would severely dent Washington's claims to reliable global leadership in the long term.
Although it extends the deadline from June 1, there is unlikely to be much elasticity left.
Should the people on Capitol Hill realize that they can't have the luxury of trying and scoring points off the other party if an economic and financial disaster of their own making is to be avoided, they should not have a chance to become narcissistic. The disaster would not only destroy the lives of millions of Americans and affect the credit rating of the USA, but also have an adverse effect on the status of the US dollar as a reserve currency that is a central part of the American hegemony that they are so desperate to maintain.
The debt ceiling tussle has resulted in a test of whether there are enough moderates in the two parties to prevent the extremes from causing widespread wrack and destruction.