A government spokeswoman said US President Joe Biden may sign a bill regulating the debt ceiling increase on Saturday. Now that the Senate has also approved a broader one, US lawmakers must work out the final details of the proposal. Once that happens, Biden can sign it almost immediately, according to the White House.
The debt ceiling limits how much the federal government in the United States can borrow. Americans have already crossed that limit this year and without an adjustment, the Treasury Department will run out of money next Monday. As a result, the United States will no longer be able to pay many benefits, but also, for example, interest on government debt. The latter means chaos in the financial markets.
Democratic Biden and Republican House Speaker Kevin McCarthy had already reached an agreement on the debt ceiling last Saturday. But this deal also had to be approved by the US Congress, as the conservative wing of the Republicans in particular believed that further cuts were needed. Now that both Houses of Representatives agree, there will be no need for a next vote on increasing the debt ceiling until after the US presidential election in 2024.
Raising the debt ceiling is usually a routine task in the United States, but tensions between Republicans and Democrats make it more difficult. So Fitch Ratings is becoming more gloomy about the financial health of the United States. The rating agency is now taking into account that the US government’s credit rating will soon be downgraded. Now the United States still has the highest score. A low score means that it is considered riskier to lend money to the United States, which means that Americans may have to spend more on interest rates.
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