The US will not default. US President Joe Biden signed into law a bill to raise the national debt ceiling. This will prevent an economically catastrophic debt default before the deadline.
According to NBCNews, the Treasury Department warned that the government could default as early as Monday, June 5.
From 2023, the Financial Responsibility Law ends limiting the public debt until January 1, 2025, after the 2024 presidential election.
“If we failed to agree on a budget, there would be extreme voices threatening to drive America into default on our public debt for the first time in our 247-year history,” Biden said of the agreement.
“Nothing, nothing would be more irresponsible. Nothing would be more catastrophic,” he added.
The legislation is known to cap spending for the next two years and includes conservative measures to return about $28 billion of unspent Covid relief funds, as well as stop $1.4 billion in IRS funding and redistribute approximately $20 billion of the $80 billion received by the IRS. due to lower inflation.
It is noted that the law on financing, not related to defense.
It is also resuming federal student loan payments after a long hiatus at the start of the pandemic and adding work requirements for people under age 55 to receive benefits under the Supplemental Food Assistance Program and Temporary Assistance to Needy Families except. for veterans and the homeless. The current threshold is 50 years.
However, Biden initially refused to negotiate a debt ceiling, insisting that the House of Representatives needed to pass the so-called clean bill without any spending cuts or policy provisions.
“I will not allow anyone to use the full faith and trust of the United States as a bargaining chip,” Biden said in January.
However, a new representative of the Republican House said that the House would not vote to raise the debt limit without significant budget cuts. Despite a split in the Republican Party, with Republican hardliners demanding deeper spending cuts and policy changes, McCarthy was able to convince his narrow majority to pass a partisan bill in late April that would cut the budget in exchange for a higher debt ceiling.
As GLOBAL HAPPENINGS reported, earlier Biden and Speaker of the House of Representatives Kevin McCarthy reached a preliminary agreement to raise the country’s national debt limit. This will allow the States to avoid default.
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Source: Obozrevatel
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.
