The apocalypse avoided? The White House and negotiators on Friday continued to forge a compromise rich in political ulterior motives to avoid a US default, which could however occur on June 5 instead of June 1, offering a short additional delay.

"We are closer (to an agreement) but it is not yet done," said a source close to the discussions, skeptical about the possibility of an announcement as early as Friday. "We made progress yesterday, I want to make progress again today," said the main Republican protagonist of this political-financial soap opera, the speaker of the House of Representatives, Kevin McCarthy. But "nothing is taken for granted until everything has been agreed," he added, just to keep up the pressure on Democratic President Joe Biden.

Four-day extension

There is no shortage of pressure in this affair difficult to understand outside the United States and more generally outside the Washington bubble. The date by which the US Treasury will be unable to meet its financial commitments has however been refined, now set for June 5, against June 1 previously, offering a few days of respite.

"Based on the most recent data available, we now estimate that the Treasury will not have sufficient resources to meet the government's obligations if Congress has not raised or suspended the debt ceiling by June 5," Treasury Secretary Janet Yellen said Friday in a letter to congressional lawmakers.

More than $130 billion in payments for pensions, health, and veterans in particular, are expected in the first two days of June, which "will leave the Treasury with an extremely low level of resources," she said.

Ball in the center

The challenge is to get Congress - the Republican House and the Democratic Senate - to vote quickly to raise the public debt ceiling, otherwise the United States could find itself in default, an unprecedented situation with potentially catastrophic economic, financial and social implications.

The agreement would freeze some spending, but without touching defense and veterans budgets, report for example the New York Times or the Washington Post. It would make it possible to postpone the risk of default for two years, until after the next presidential election.

Each side wants to limit the damage at the political level. Kevin McCarthy, who needs to assert his stature as speaker of the House, could boast of having injected more fiscal discipline, while the Democrats would claim to have protected social benefits or major investment projects. The US president, campaigning for re-election, explained Thursday that "two opposing visions" were at work in these discussions.

Some progressives within the Democratic Party, as well as some elected representatives of the Republican Party, have threatened not to ratify, or to delay as much as possible a text that would make too many concessions to the opposing camp. Joe Biden and McCarthy must therefore play at the center to rally the most parliamentarians in each party, an exceedingly difficult exercise in a country where political cleavages have widened markedly in recent years.

  • World
  • USA
  • Debt crisis
  • Joe Biden
  • Kevin McCarthy