Compromise in the US debt dispute. Republican President McCarthy rules out default.

The United States is no longer allowed to take on new debts. Democrats and Republicans must agree, otherwise the United States may become insolvent.

Speaker of the US House of Representatives Kevin McCarthy doesn’t expect a falter. “There will be no default,” McCarthy told CBS. He will meet with President Joe Biden next Wednesday to find a compromise in the debt limit dispute. McCarthy said out-of-control spending must be brought under control. However, he promised no savings in Social Security and health insurance. When it comes to defense spending, he wants to make sure the money is used effectively and efficiently.

The White House has so far refused to make any concessions on raising the debt ceiling. On Thursday, Biden said he would not allow anyone to use America’s creditworthiness as a bargaining chip.

The debt ceiling is $31.4 trillion

The United States had already reached the federal debt ceiling authorized by Congress on January 19. Finance Secretary Janet Yellen said in mid-January that the government could remain solvent through the beginning of June by reallocating funds. After that, he threatened default. To date, the debt limit is around 31.4 trillion US dollars (currently just under 29 trillion euros).

In the past, Republicans and Democrats always agreed to raise the cap — albeit often after a difficult struggle. This is to be expected this time as well. Republicans regained a narrow majority in the House of Representatives in the November midterm elections. In order to secure the votes needed for the presidency, McCarthy had to make sweeping concessions to the far-right wing of the party. Radical MEPs oppose raising the debt ceiling. The underdevelopment of the world’s largest economy could have dire consequences for the global economy.

dpa