“US President Joe Biden and Republicans reach agreement on raising national debt ceiling”

US President Joe Biden and the Republicans have reached an agreement in principle on raising the national debt ceiling to avoid a national default, the President and the Speaker of the House of Representatives, Republican Kevin McCarthy, announced on Saturday evening.

The United States debt ceiling is currently $31.4 trillion. By what amount they will be raised, it is not yet revealed.

Congress is scheduled to vote on the agreement on Wednesday, May 31.

The US Ministry of Finance has estimated that the US national debt ceiling would be reached on June 5.

Biden said the deal was good news for the American people because it would prevent a potentially catastrophic default that would lead to an economic recession and millions of lost jobs.

McCarthy, who called Biden on Saturday to hammer out a deal, said there was still work to be done but expressed confidence the deal was a good one.

In order to allow the government to continue borrowing money and maintain its solvency, the national debt ceiling has been raised, extended or revised a total of 78 times since 1960.

This usually happens without much political fuss, but this year, in exchange for votes to raise the debt ceiling, congressional Republicans demanded significant spending cuts and changes to Biden’s policies, including the student loan repayment program and green energy tax credits. Democrats opposed it.

But by all accounts, both sides have made some concessions.

A source informed about the negotiations revealed that the agreements envisage an increase in the debt ceiling for two years, which means that in 2024, when the US presidential elections are scheduled, such negotiations will not be necessary.

However, there are no major spending cuts that the Republicans wanted, but non-defense spending will actually remain unchanged next year and increase by only 1% in 2025, the source revealed.