Posted in: Last updated:
Shortly after midnight on Wednesday, the US Congress approved a bill that would raise the US debt ceiling while limiting federal spending, risking the world’s largest economy defaulting on its debt. The Republican-controlled Congress raised the new cap to $32.9 trillion through March 2024, plunging the country into a frantic confrontation on the cusp of the presidential election. The bill cuts federal spending and eliminates key parts of President Biden’s program, such as his efforts to cancel student debt and combat climate change, which Biden has rejected.
In an effort to drag the president Joe Biden To counteract, Republicans in the US House of Representatives passed a bill raising national debt ceiling In parallel with cutting federal spending, despite the risks that this entails that the United States may default on its debts.
The US government expects it to reach the debt ceiling within weeks, raising the possibility of a default by the world’s largest economy and causing a crisis in global markets.
The “Reduction, Savings and Growth” bill was passed in the House of Representatives by a slim majority of 217 deputies compared to 215, but the Democrats’ control of the Senate and the White House makes it difficult to turn it into law.
Republicans have struggled to pass the law in the House of Representatives with the aim of strengthening their position in negotiations with Biden, who resolutely refuses to agree to any spending cuts in return for raising the debt ceiling.
And the victory was celebrated by Speaker of the House Kevin McCarthy, who conducted frantic negotiations to compensate for the votes of some Republican representatives who rejected his project, saying that this bill would put America “back on the right track.” “Our House met to pass the only plan in Washington that will address the debt ceiling and stop excessive and bloated federal spending,” he added.
This confrontation is seen as a test of McCarthy’s leadership, who reached the House presidency last January by pledging to the hard-right wing of the Republican Party to cut federal spending.
Immediately after the vote was completed, the White House criticized legislation that cuts off health care for veterans and other Americans and expands tax cuts for the wealthy.
“The president has made it very clear that this bill has no chance of becoming law,” said White House spokeswoman Karen Jean-Pierre. “Republican members of Congress must act immediately and unconditionally to avoid default, and to ensure that the reputation and commitments of the United States are not jeopardized,” she added, warning, “This is their job.”
The United States has nearly $32 trillion in debt, a figure that has been accumulating under presidents belonging to both major parties for decades. The 320-page Republican bill raises the debt limit through March 2024, paving the way for another limit confrontation in the midst of the presidential election campaigns, or until the debt reaches $32.9 trillion.
But he’s drastically cutting federal spending and scrapping key parts of Biden’s platform, such as his efforts to cancel student debt and fight federal debt Climate change.
Biden has refused to accept any increase in the debt ceiling that includes spending cuts, and McCarthy hopes that passage of the bill will force him to negotiate.
US Treasury debt is the basis for evaluating safe assets in the world, and its interest rates are the basis for pricing products and financial transactions around the world.