Pulling The US Economy Away From The Brink Of Disaster

There have been many partisan debates over the nation’s debt ceiling in the past, but they don’t typically get as close to catastrophe as the latest one did.

With just days until the U.S. economy was poised to default on its debt, which could cause untold harm to millions of Americans and the nation’s standing on the world stage, both sides reported reaching a tentative agreement on Saturday.

A little background

The nation’s debt has continued to increase year over year throughout much of its history, and Republicans wanted to ensure that there were some budget cuts included in any agreement that would lead to another increase in the debt limit.

Democrats, on the other hand, argued that such spending cuts would unfairly impact those who rely on government assistance — and President Joe Biden insisted on a so-called “clean” debt ceiling hike.

The difference of opinion resulted in an impasse that many worried would not be resolved before a default, which had been forecasted to take place as soon as this week.

Breaking the deadlock

In a statement over the weekend, Biden and House Speaker Kevin McCarthy (R-CA) confirmed that they had struck a deal that would put certain limits on spending in exchange for an increase in the debt limit.

It’s still unclear whether lawmakers on Capitol Hill will approve the bipartisan deal, but both parties are worried about a default so the chances seem pretty good.

Here are some early details about the deal:

• The debt ceiling increase would be effective until after next year’s election.
• Spending cuts are included, but not as many as Republicans wanted.
• Tax enforcement and environmental permitting were among the issues addressed.

It appears we can breathe a sigh of relief … at least until 2025 rolls around.

Chris Agee May 29th, 2023

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