President Biden Raises Debt Ceiling to Avoid Default
President Joe Biden signed a bill on June 3rd, just two days before the deadline, which lifts the nation’s debt ceiling and prevents an unprecedented default on the federal government’s debt. Following weeks of intense negotiations, the agreement suspends the debt limit until 2025 and restricts government spending.
Raising the Debt Ceiling Ensures Payment of Existing Debts
Currently at $31.4 trillion, raising the nation’s debt ceiling will ensure that the government can borrow to pay debts already incurred. This move was critical, as the Treasury Department had warned that the country would soon run short of cash to pay its bills, potentially sending catastrophic shockwaves through the U.S. and global economies. President Biden emphasized the importance of compromise and consensus in reaching this agreement, which averted an economic collapse.
Effects of the Agreement on Federal Programs
The agreement also affects a range of federal programs. It imposes new work requirements for older Americans receiving food aid, affects the eligibility for federal food assistance, and greenlights an Appalachian natural gas pipeline that faces opposition from many Democrats. Some environmental rules were modified to help streamline approvals for infrastructure and energy projects, a move long sought by moderates in Congress.
Increased Funding for Defense and Veterans
The legislation bolsters funds for defense and veterans, cuts back some new money for the Internal Revenue Service, and rejects Biden’s call to roll back Trump-era tax breaks on corporations and the wealthy. However, the White House confirmed that the IRS’ plans to step up enforcement of tax laws for high-income earners and corporations would continue. The agreement also imposes an automatic overall 1% cut to spending programs if Congress fails to approve its annual spending bills by the end of the fiscal year in September.
Bipartisan Support for the Agreement
In both the Senate and the House, more Democrats backed the legislation than Republicans, but both parties were critical to its passage. President Biden praised all congressional leaders, especially House Speaker Kevin McCarthy, for their responsible actions and prioritizing the good of the country over politics during the negotiations.
Story at apnews.com – 2023-06-03 18:09:28
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