US avoids default: Senate passes bill suspending debt ceiling

The US will not default. After weeks of tension, intense negotiations and anxiety, and four days before he was warned the country would run out of money to meet the obligations it had already undertaken, Senate gave this thursday night green light for Law that suspends the debt ceiling until January 1, 2025. The crisis, unprecedented in US history and with devastating consequences for both the national economy and the global economy, was avoided.

In the Senate, as well as in the House of Representatives the previous day bipartisan support to the norms negotiated by President Joe Biden and the Lower House Republican leader, Kevin McCarthy. especially, 63 senators supported and 36 people opposed it. marathon day 11 amendments were voted on and rejected. Had any of these amendments been passed, the law would have to be sent back to the House, and it would have been impossible for it to arrive in the House on time. Monday, date X Treasury Secretary Janet Yellen pointed to the moment when the United States would not be able to meet its payments if it was not allowed to continue borrowing.

Political negotiations prevented this, denial created by the pact The ultra-conservative wing of the Republican Party Besides the progressive wing of the Democratic Party. The first denounced that the spending cuts achieved were not enough and that too many concessions were made to the Democrats to the conservatives. And now Biden only has to sign included in the legislation that may come into force over time.

“Together, the Senators have shown once again that, America is, and always will be, a country that pays its bills and fulfills its obligations.The President said in a statement immediately after the vote, ”he said.

“Nobody can get everything they want in a negotiation, but make no mistake: this bipartisan agreement, great victory For our economy and for the American people,” Biden also drew attention. He will address the nation this Friday.

Keys to the deal

The deal between Biden and McCarthy is not on the agenda, but Suspends debt ceiling until January 2025It is practically equivalent to an increase as it enables the US to meet its payments up to that date. Against this, spending cuts and caps on many national programs over the next two yearsalthough it does not touch on social security or Medicare, the public health assistance program for the elderly.

Specifically, the agreement mandates to maintain so-called discretionary spending (from which federal agencies and programs are funded) in the coming fiscal year and to increase it by only 1% by 2025; includes an increase in inflation. Inside military spendingon the other hand confirmed for 2024 rise 3.3% spending up to 886,000 million (as Biden requested) and 895,000 million in 2025.

Although Biden initially and for some time insisted that he would not negotiate a debt ceiling with the Republicans and only offered to talk separately about budgets and conservative calls for deep cuts, he had to. But one of his greatest achievements, A similar crisis will not happen until after the 2024 presidential election. And it succeeded work requirements to receive public assistance programs such as Medicaid (public health service for the poorest) or More limited than Republicans would like in case of helping families in need.

Source: Informacion


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