US debt deal faces tough sell in Congress to avoid default

World

Published: 2023-05-28 20:13

Last Updated: 2024-06-13 10:39


US debt deal faces tough sell in Congress to avoid default
US debt deal faces tough sell in Congress to avoid default

A day after securing a tentative deal to prevent a cataclysmic US debt default, Republican and Democrat leaders began the hard task Sunday of winning over skeptics in both their parties in order to shepherd the legislation through Congress before the government runs out of money.

The agreement announced Saturday by President Joe Biden and Republican leader Kevin McCarthy after weeks of crisis talks offers a path back from the default precipice, but it is far from certain that the compromises it contains can garner the support it requires from both sides of the aisle.

And all the while the clock is still ticking down to the June 5 "X-date" when the Treasury estimates the government will start to run out of cash to pay its bills and debts.

A default would likely have catastrophic consequences, triggering a US recession and risking a global economic meltdown.

The basic framework of the deal suspends the federal debt ceiling, which is currently USD 31.4 trillion, for two years — enough to get past the next presidential election in 2024 and allow the government to keep borrowing money and remain solvent.

In return, the Republicans secured some limits on federal spending over the same period.