America anxiously waits for Congress to prevent bankruptcy

According to Reuters, the parties agreed to temporarily suspend the $31.4 trillion debt ceiling until January 1, 2025, so that the government can borrow money to pay for expenses. In return, non-defense government spending in fiscal year 2024 will remain at current levels and increase by a maximum of 1% in 2025.

New work requirements will apply to food stamp recipients. The administration will also end student loan forbearance by the end of August. President Joe Biden’s plan to cancel $430 billion in student debt is unaffected because it is awaiting a Supreme Court ruling. The deal also clears the approval process for some energy projects, recovers unused Covid-19 relief funds, and creates a mechanism to force agencies to save money before taking actions that affect revenue and spending.

In a statement at the White House early this morning, President Biden said the deal helped to dispel the threat of default, while affirming that he had not given up too much. The leader called on the House and Senate to quickly pass the deal to "fulfill their duty and build the strongest economy in the history of the world."

On the Republican side, some say it is more of a political victory than a substantive one, as it does not address the underlying causes of the budget deficit. McCarthy acknowledged that it did not meet all of his demands, but predicted that a majority of Republicans would pass the deal. "And with Biden's support, I expect his party to support it," McCarthy said.

ABC News reported that both the White House and House leaders are working to communicate and explain the deal to lawmakers to gain the necessary support. The House is expected to vote on May 31. Meanwhile, in the Senate, any member can block the vote for days. However, with the support of the Senate's bipartisan leaders, it is likely that there will be enough 60 votes to override any potential delay efforts. The Senate could vote on the deal on June 2 or later this week, before the June 5 deadline that the Treasury Department has warned puts the debt repayments at risk.

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