Last night, Joe Biden and Kevin McCarthy reached an agreement in principle on raising the debt ceiling of the United States government. This should be raised to 31.4 trillion dollars, and the vote on the final terms is scheduled for Wednesday in Congress.
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US reaches tentative agreement on debt ceiling
On the night of Saturday to Sunday, the United States have reached a temporary agreement on the government’s debt ceiling. This announcement follows telephone negotiations between President Joe Biden and Speaker of the House of Representatives Kevin McCarthy.
As a reminder, while the situation was not progressing until then, the country could theoretically have found itself in default of payment at the beginning of June for lack of agreement.
Kevin McCarthy also pointed to the fact that Joe Biden has “wasted time and refused to negotiate for months“. Last week, he didn’t mince words about the situation :
“President Biden doesn’t think there’s a single dollar of savings to be found in the federal government’s budget. He would rather be the first president in history to default on debt than risk upsetting the radical socialists who are running the Democrat boat right now. »
Thus, this agreement should make it possible to raise government debt ceiling to $31.4 trillion. As an indication, it is more than the gross domestic product of the country (GDP). And for good reason, the latter amounted to 25,461 billion dollars in 2022.
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Concessions announced
In order to reach this agreement in principle, both sides had to make concessionsas Joe Biden pointed out:
“The deal represents a compromise, which means not everyone gets what they want. It is the responsibility to govern. […] Over the next day, our negotiating teams will finalize the legislative text and the agreement will go to the US House and Senate. »
While details of the deal were not provided, Reuters reports that the expenses would include capped for two years. In addition, unused Covid funds will be recovered and new tax regimes originally planned would be blocked. From 2025, spending could increase again at 1% per year.
According to Kevin McCarthy, the final terms of this agreement will be voted on Wednesday by Congress.
Along with this announcement, Bitcoin (BTC) saw its price increase slightlytrading at just over $27,200 as of this writing, up 1.5% over the past 24 hours.
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Sources: Reuters, Twitter
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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