Kevin McCarthy tells reporters about debt ceiling negotiations with President Biden.Photo: ANDREW CABALLERO-REYNOLDS/AFP via Getty Images
Republican House SpeakerKevin McCarthyon Saturday evening announced that he and PresidentJoe Bidenhad reached a tentative deal on raising the debt ceiling for two years, offering hope of avertingthe economic catastrophe that would come with a default.
Biden, McCarthy, and other congressional leaders met numerous times in recent weeks to discuss a plan that would make both political parties comfortable in deciding to raise the debt ceiling, which is the total amount of money that the federal government is authorized to borrow to meet its existing legal obligations.
The treasury secretary had been warning Congress that the U.S. was on track to default on its debts as early as June 1 if they could not reach an agreement to raise the borrowing limit, meaning the federal government would run out of money to spend on vital programs. Anyone receiving any sort of payment from the federal government — Social Security payments, military and veterans benefits, food stamp payments, etc. — would no longer receive those benefits in that case.
The U.S. has never defaulted on its debt before, and the impact of a default would have reverberated throughout the global economy. “There will be no acceptable outcomes if the debt ceiling isn’t raised, regardless of what decisions we take,” Treasury SecretaryJanet Yellensaid in a recent interview withNBC.
With a deal within reach, members of the U.S. House and Senate are now tasked with getting behind the legislation that raises the borrowing limit so that Biden can sign it into law and prevent further economic harm.
source: people.com
