The White House reached an agreement with the opposition

US President Barack Obama announced that the administration had reached an agreement with the leaders of the Republican opposition in Congress. The agreement, which has already been supported by representatives of both parties, provides for a gradual increase in the United States debt limit and avoids declaring a technical default. The President stressed that the final decision depends only on members of Congress, and called on them to “make the only possible choice.” The White House hopes lawmakers will approve the new agreement by Tuesday.

The fact that after negotiations that lasted the last few days, the administration managed to reach an agreement with the leaders of the Republican opposition became known on Sunday evening. At 8:20 p.m. Washington time, when it was already deep night in Moscow, the White House press service issued an emergency message announcing that President Barack Obama would make a special address to the nation. The press conference of the head of the White House, which took place exactly 20 minutes later, was unexpectedly short. “We still have important votes to take in Congress, but I want to announce that leaders of both parties in both houses have reached an agreement that will reduce the budget deficit and avoid a default that would be catastrophic for the country's economy,” Barack said. Obama.

As it became known, the final round of negotiations, which in addition to the US President included Vice President Joe Biden, Republican Minority Leader in the Upper House Mitch McConnell and Senate Speaker Harry Reid, began at 9 am on Sunday and lasted almost 11 hours. As Barack Obama admitted during a hastily convened press conference, in order to reach an agreement with representatives of the Republican opposition, he had to make serious concessions. “If you ask me whether I would prefer such a deal myself, the answer is no,” he said. “We could insist on making the necessary legal reforms and changes to tax laws right now, rather than waiting for the decision of the special congressional committee. But this compromise allows us to begin the process of reducing the deficit and ensures that we do not face a similar crisis in six, eight or twelve months.”

What do the debt crises in the US and Europe have in common?

The basis of the new agreement was an agreement to reduce budget spending by $2.4 trillion over the next 10 years. At the same time, both the revision of budget expenditures and the increase in the US national debt limit, which the White House insisted on, must take place in two stages.

By Tuesday evening, Congress must approve a bill that would increase the federal borrowing limit by $900 billion. This measure, according to the White House Budget Committee, will postpone the issue of default until at least the end of 2011. In return, the administration agreed to the Republicans' main proposal, which insisted on a package of measures that would allow for $917 billion in budget cuts over the next 10 years.

Further steps will depend on the recommendations of a special committee of the US Congress, which will include representatives of both parties. By November 23, committee members must propose their own plan, which would involve further cuts in spending by $1.5 trillion over a ten-year period. It is this point that should attract the votes of Republicans, who insist that borrowing levels can be increased by exactly the same amount that could be saved by conducting a budget audit and refusing to finance a number of government programs. Exactly a month is allotted for consideration of this bill in the US Congress, and already on December 23, the US national debt limit can be increased by exactly the same amount.

History of debt ceilings

The White House insisted on raising the limit by $2.4 trillion during the negotiations. According to experts on the administration's budget committee, this move allows the federal government to avoid returning to the issue of borrowing in the midst of a presidential campaign.

Nevertheless, representatives of the Republican opposition managed to include a clause in the new agreement that provided Congress with broad room for maneuver. If by November 23, for example, members of the special commission manage to agree to reduce budget items not by $1.5 trillion, but only by $1.2 trillion, then the federal government's borrowing limit will automatically be increased by the same amount.

Moreover, if the commission members fail to reach an agreement, Congress will be forced to begin discussing a deficit-free budget. The agreement specifically stipulates that cuts must simultaneously affect both military and civilian programs. Despite protests from Democrats, representatives of the Republican Party managed to ensure that the Medicare health care program for the elderly was included in the list of programs subject to revision. Over the next 5 years, Congress must approve raising the age of participants in this program from 65 to 67 years and make changes to the list of medical services that are fully paid for by the state. In exchange, the Democrats stipulated that the military department budget would be subject to serious cuts. Already in 2012, Pentagon funding could be reduced by $17 billion.

According to White House experts, the new agreement allows for the interests of representatives of both parties to be respected. On Sunday evening, Senate Speaker Harry Reid said he was confident that the document would receive support in both houses of Congress. In turn, Speaker of the Lower House John Boehner, who twice in the last two weeks refused any negotiations with the White House, noted that the compromise reached fully meets the interests of the Republican Party. “The fight was long and we fought valiantly,” he said late Sunday during an emergency caucus meeting. “As a result, we received a document that corresponds to our principles.”

Kirill Belyaninov, New York

Republicans were left without default