Thursday, September 28, 2023

Democrats and Republicans reach an agreement in principle to raise the debt ceiling

The White House and Republicans have reached an “agreement in principle” increase credit limit and prevent the United States from entering into a suspension of payments, confirmed Kevin McCarthy, Speaker of the House of Representatives. “I just got off the phone with the President a while back. After wasting our time and refusing to negotiate for months, we have reached an agreement in principle that the American people deserve,” McCarthy said in a message on social media. Minutes later, a press conference In a brief appearance, McCarthy assured that the agreement included “historic” reductions in public spending and reforms that would “lift people out of poverty and put them in the workforce.”

Furthermore, he stressed that it does not include new taxes or new government programs. “We still have a lot of work to do to complete the full text” of the agreement, warned the leader of Republicans in Congress, who did not want to answer questions from the press. This decision was known after a few hours telephone conversation President Joe Biden had with McCarthy this afternoon. When a definitive agreement is reached, the 72-hour rule must be followed, which gives legislators three days to read the text before the House votes on it.

Thus, the consensus that would raise the federal debt limit in exchange for spending cuts called for by Republicans must be turned into legislative language and passed in both the Republican-led House of Representatives and the Republican-controlled Senate by Democrats. This Friday Treasury Secretary Janet Yellen updated them deadline estimation After which the country could find itself in default if Congress doesn’t first agree to raise or suspend the debt limit. Yellen said the date would be June 5, four days later than previously estimated.

The debt ceiling is the total amount that the United States government is authorized to borrow to meet its current legal obligations to pay Social Security and Medicare benefits, military pay, and interest on the national debt. tax deduction and other payments. From time to time, the United States faces default on its national debt because, unlike other countries, the government can only issue debt up to a limit set by Congress, which has the power to increase that limit. as he sees fit.

On 19 January, the country reached its legal debt limit of $31.4 trillion, equivalent to 29 trillion euros, causing the Treasury Department to resort to extraordinary measures to pay bills that have since been suspended. certain payments to retirement funds Social Security for federal employees and postal workers, among others. The use of these special financial instruments could be extended until June 5, at which time the United States would suspend payments if Republicans and Democrats could not reach an agreement.

Nation World News Desk
Nation World News Desk
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