2023-05-29 23:22:00
NY.- The full legislative text of the agreement that House Speaker Kevin McCarthy made with President Biden on the suspension of the country’s debt ceiling revealed new and important details, the proposal is expected to be voted on this week by the legislators of the Camera.
The core part of the deal remains a two-year suspension on the debt ceiling, which comprises the full amount of money the government is allowed to borrow as debt.
Waiving that cap, which currently stands at $31.4 trillion, would allow the government to keep asking for more money and paying its debts on time — as long as Congress approves the deal before June 5, when the Department Treasury has said that the United States will run out of resources.
In exchange for suspending the cap, the Republicans demanded a series of political concessions from Biden.
Most important will be limits on Biden’s discretionary spending growth for some new job requirements for certain food stamp recipients and the Temporary Assistance for Needy Families program.
Both sides agreed to make modest efforts to speed up some energy projects —- and, in a surprise move, the rapid construction of a new natural gas pipeline from West Virginia to Virginia that has been championed by Republican lawmakers and a key centrist Democrat .
The agreement will suspend the debt limit at $31.4 trillion until January 2025.
Suspending the debt limit for a period of time is different than setting a new level.
This essentially gives the Treasury Department the power to lend out as many resources as are needed to pay for the country’s expenses in that period, plus a few months following the limit has been reached, although the Department does employ certain accounting maneuvers to increase the Payments.
This is different from the proposal passed by House Republicans to increase the cap by $1.5 trillion through March 2024, whichever comes first.
Under the new legislation, the debt limit will be set at whatever level it reached when the suspension ends.
For political reasons, Republicans tend to prefer to suspend the debt limit rather than increase it, so they can say they didn’t approve a higher debt limit.
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