Preliminary deal is not enough, US still on track to default

On May 29, some US Republican congressmen said they would oppose the agreement to raise the $31.4 trillion public debt ceiling.

The agreement to raise the debt ceiling faces many obstacles in the US Congress . (Source: AFP)

This is a sign that a bipartisan deal on the US debt ceiling could hit a roadblock in Congress before the government runs out of money next week.

After weeks of negotiations, US President Joe Biden and House Speaker McCarthy reached a preliminary agreement on the public debt issue late on May 27.

According to the agreement, the two sides agreed to suspend the debt ceiling for two years, until January 1, 2025; limit budget spending for fiscal years 2024 and 2025, accordingly, in fiscal year 2024, 886 billion USD will be allocated for the defense budget and 704 billion USD for non-defense items.

Thus, non-defense spending in general will remain unchanged in fiscal year 2024. The two sides agreed to increase non-defense spending by 1% in fiscal year 2025.

In addition, the two sides agreed to recover unused Covid-19 funds; speed up the licensing process for some energy projects and increase conditions for programs for the poor.

Florida Governor Ron DeSantis, a potential Republican candidate in the 2024 US presidential election, said the deal was not enough to change the fiscal direction.

Speaking to Fox News , Mr. DeSantis commented: "After this agreement, the United States will still be on track towards the risk of default."

Source: https://baoquocte.vn/thoa-thuan-so-bo-la-chua-du-my-van-tren-da-huong-den-nguy-co-vo-no-229034.html