Biden and McCarthy strike U.S. debt ceiling deal

TL;DR Breakdown

  • Biden and McCarthy agree on suspending the $31.4 trillion U.S. debt ceiling.
  • The deal includes a spending cap and added food aid requirements.
  • The bill’s passage requires balancing between Republicans and Democrats.

On the cusp of the weekend, the 46th President of the United States, Joe Biden, and Kevin McCarthy, a leading Congressional Republican, brokered an agreement in principle to suspend the towering $31.4 trillion federal government debt ceiling.

This critical breakthrough comes after a period of prolonged deadlock, marking a significant step towards averting a potential fiscal crisis.

This accord, however, was unveiled against a backdrop of pervasive bitterness reflecting the acrimonious nature of the negotiations and the subsequent challenges that lay ahead for its passage through Congress before the U.S. government exhausts its resources to service its debt in early June.

Key terms of the deal

“Biden’s phone conversation with McCarthy was what finally catalyzed this agreement,” McCarthy wrote on Twitter, adding that while not perfect, the deal is fitting for the American public.

Echoing his sentiment, Biden acknowledged that compromises were inherent to governance, and thus not everyone could get their way.

The terms of this agreement propose to suspend the debt ceiling until January 2025. Notably, the arrangement would curtail spending for the 2024 and 2025 fiscal budgets, reclaim unutilized COVID funds, accelerate the approval process for select energy projects, and impose additional prerequisites for food aid programs catering to less affluent Americans.

Following a spate of drawn-out negotiations, the arrangement materialized amid a rapid series of phone calls. The culmination of these discussions was a 90-minute conversation between Biden and McCarthy on Saturday evening.

There’s more groundwork to be laid, as McCarthy cautioned. He projected the completion of the bill’s writing by Sunday, followed by a discussion with Biden and, subsequently, a vote on the agreement by Wednesday.

A fine balancing act is now incumbent on Biden and McCarthy as they navigate this bipartisan agreement through a precariously divided Congress. With the Republican majority in the House and the Democratic majority in the Senate, bipartisan backing is critical for the deal’s passage before Biden can ratify it.

The negotiators consented to maintain non-defense discretionary spending at the 2023 level for one year, increasing it by 1% in 2025, as revealed by an inside source.

Facing the critics: Skepticism and expectations

McCarthy assured that the deal includes historic reductions in spending, influential reforms to facilitate poverty alleviation and workforce integration, and restrictions on government overreach. “Importantly, it refrains from introducing new taxes or government programs,” McCarthy affirmed.

The agreement’s ultimate goal is to stave off an economic upheaval triggered by a potential default. Nevertheless, this objective hinges on the deal’s successful passage through a narrowly split Congress before the Treasury Department depletes its funding to fulfill its commitments.

A warning to this effect was issued by the Treasury on Friday, signaling an impending crisis if the debt ceiling was not resolved by June 5.

The proposal sparked a flurry of criticism from House Republicans, who have been advocating for drastic spending reductions. Some, like Representative Bob Good, were outspoken about their opposition, citing the proposed $4 trillion debt increase as indefensible.

The task ahead is far from completed. The requirement for bipartisan agreement, coupled with the stipulation for a 72-hour review period before a floor vote, presents a formidable challenge to garner sufficient backing from moderate members to outweigh opposition from both extreme right Republicans and progressive Democrats.

The bill’s ultimate test will then be the Senate, where a minimum of nine Republican votes will be required for its success. Despite the agreement, numerous hurdles remain on the path to raising the debt ceiling.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

文章来源于互联网:Biden and McCarthy strike U.S. debt ceiling deal

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年5月31日 03:19
Next 2023年5月31日 04:41

Related articles

  • Nvidia unveils DGX GH200, supercharges AI development and gaming industry

    TL;DR Breakdown At the Computex event in Taiwan, Nvidia unveiled the DGX GH200, a state-of-the-art AI supercomputer. Alongside the DGX GH200, Nvidia announced Nvidia ACE for Games, a platform that will utilize AI to create game NPCs with more depth and personality. Using AI and metaverse technologies, Nvidia plans to partner with WPP to reduce advertising costs. Nvidia, a forerunner in developing artificial intelligence (AI) tools and applications, has disclosed ambitious plans to roll out an array of innovative AI products. During the Computex event in Taiwan on May 28, Nvidia’s CEO, Jensen Huang, introduced the DGX GH200, a state-of-the-art AI supercomputer designed to assist tech firms in creating advanced versions of the renowned AI chatbot, ChatGPT. Huang expects that leading tech companies such as Meta, Microsoft, and Google’s Alphabet will be among the early adopters of the new AI powerhouse. Alongside this announcement, Huang also revealed Nvidia ACE for Games, a service aimed at the gaming industry. This platform will harness AI to imbue game NPCs with more depth and personality. Nvidia also plans to join forces with communications…

    Article 2023年6月2日
  • ISDA Welcomes Ripple Labs as Member of Elite Global Derivatives Trade Body

    TL;DR Breakdown Ripple Labs has become a member of the ISDA, joining over 1000 institutions from 79 countries and aligning itself with financial giants like JP Morgan and Goldman Sachs. Following a favorable legal ruling regarding the sale of XRP tokens, Ripple’s ISDA membership could pave the way for increased collaboration and acceptance of cryptocurrencies in mainstream finance. Description In a significant development, Ripple Labs, a leading player in the cryptocurrency market, has become a member of the International Swaps and Derivatives Association (ISDA). This prestigious trade organization comprises market participants for over-the-counter (OTC) derivatives. Ripple’s inclusion in the ISDA makes it one of the few cryptocurrency companies to join the ranks of global … Read more In a significant development, Ripple Labs, a leading player in the cryptocurrency market, has become a member of the International Swaps and Derivatives Association (ISDA). This prestigious trade organization comprises market participants for over-the-counter (OTC) derivatives. Ripple’s inclusion in the ISDA makes it one of the few cryptocurrency companies to join the ranks of global financial giants such as JP Morgan, Blackrock, Goldman…

    Article 2023年8月5日
  • How U.S. rising inflation could force the Fed’s hand

    TL;DR Breakdown U.S. inflation is expected to slow significantly, potentially causing the Federal Reserve to pause interest rate increases in June. The drop in inflation is driven by weaker energy prices, while core CPI remains high due to used car prices. The anticipated decrease in inflation and its impact on interest rate policy is being closely monitored globally. Eurozone and U.K. economies also face inflation-related challenges, prompting discussions on interest rate adjustments. The U.S. economic landscape is experiencing a shift as the anticipated decrease in inflation looms, with the possibility of prompting the Federal Reserve to halt its interest rate hikes. Set against a backdrop of only marginal easing in April, this downward inflation trend could create compelling grounds for the Federal Reserve to hit the pause button on interest rate increments come June. Shifting U.S. inflation trends The Bureau of Labor Statistics is predicted to deliver an encouraging report showing that inflation was 4.1% year-on-year in May, a considerable reduction from April’s 4.9% and the 5% observed in March. The expected decrease in the Consumer Price Index could add…

    Article 2023年6月14日
  • Venezuela’s President seeks entry into the BRICS bloc with China’s support

    TL;DR Breakdown Venezuela’s President Nicolas Maduro is actively seeking China’s support to join BRICS. Venezuela and China have signed a Memorandum of Understanding to cooperate on developing and modernizing special economic zones. The BRICS bloc has admitted six new members, expanding its influence and commitment to reshaping the global order. Description Venezuela’s President Nicolas Maduro is actively seeking China’s support in joining the recently expanded BRICS group, a bloc of Brazil, Russia, India, China, and South Africa. This move comes as the BRICS members recently agreed to admit six new full members. Venezuela seeks entry into BRICS In an interview with the Chinese state news agency … Read more Venezuela’s President Nicolas Maduro is actively seeking China’s support in joining the recently expanded BRICS group, a bloc of Brazil, Russia, India, China, and South Africa. This move comes as the BRICS members recently agreed to admit six new full members. Venezuela seeks entry into BRICS In an interview with the Chinese state news agency Xinhua, Maduro expressed his aim to secure Venezuela’s entry into BRICS, emphasizing the importance of China’s…

    Article 2023年9月10日
  • SEC’s Request to Seal Hinman Documents Denied by Court

    TL;DR Breakdown The court has denied the SEC’s request to seal the documents related to the deposition of William Hinman, former SEC Director of the Division of Corporation Finance, in the Ripple-SEC lawsuit. The decision emphasizes transparency and accountability, allowing Ripple access to important information regarding the SEC’s classification of XRP. In a significant development in the ongoing legal battle between the United States Securities and Exchange Commission and Ripple Labs, the court has denied the SEC’s request to seal the documents related to the deposition of William Hinman, former Director of the Division of Corporation Finance. The decision comes as a blow to the efforts to maintain confidentiality around the discussions surrounding the regulatory status of cryptocurrencies, particularly Ripple’s XRP token. This article delves into the details of the court’s ruling and its potential implications on the case. SEC’s Attempt to Seal Hinman Documents Rejected The court’s decision to deny the request to seal the Hinman documents marks a significant turning point in the Ripple-SEC lawsuit. The Hinman deposition is crucial to Ripple’s defense as it pertains to the…

    Article 2023年5月18日
TOP