McCarthy, in a statement to the press, said that he saw an agreement on the debt limit.
Expressing that he believes he is in a much better position compared to a week ago, McCarthy stated that the issue was discussed professionally.
McCarthy stressed that the House of Representatives will need to vote next week on the deal reached by negotiators appointed by him and US President Joe Biden, to avoid a historic US default.
Pointing out that a deal in principle is possible this weekend, McCarthy noted that negotiators discussed the amount of spending cuts and the extent and duration of the debt ceiling increase or suspension.
Yellen gave the date June 1st.
In a letter sent to McCarthy earlier this week to share updated information on the debt limit, US Treasury Secretary Janet Yellen warned that the country could face a cash shortage if the debt limit is not increased or suspended by June 1.
Yellen reported that waiting until the last minute to suspend or increase the debt limit could cause serious damage to business and consumer confidence, increase short-term borrowing costs for taxpayers and negatively affect the US credit rating.
US President Joe Biden met again this week with Congressional leaders to discuss the debt limit.
debt limit dilemma
In the US, the federal government has reached the $31.4 trillion debt limit that could lead to default.
The debt limit, or debt ceiling, means “the upper limit on the amount of money the U.S. government can borrow to pay off its debts.”
Republicans, who hold a majority in the House of Representatives, are in favor of significant spending cuts in debt-limit negotiations. Democrats insist on increasing the debt limit and reject Republican proposals to cut certain spending.
There are concerns that the debt limit issue, which has become a deadlock between Democrats and Republicans, will shake the markets. As recession expectations rise in the US, the two-party showdown over the debt limit carries more risk than ever before.