U.S Debt ceiling deal: President Biden finalises budget agreement with Speaker McCarthy

To avert a devastating default, U.S president Joe Biden and the house Republicans have reached a deal to raise the government's debt ceiling. Joe Biden finalised a budget agreement with the house speaker Kevin McCarthy, to suspend the $31.4 trillion debt ceiling until 1st Jan 2025. The deal is ready to move to Congress for vote.

"It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery," Biden told reporters at the White House.

Apart from the suspension of the debt ceiling, the agreement also caps spending in the 2024 and 2025 budgets, claw back unused Covid funds, speed up the permitting process for some energy projects and include extra work requirements for food aid programs for poor Americans.

The bill would also authorise more than $ 886 billion for security spending in Fy24 and non-security funding gets over $ 703 billion. In 2025, a 1% increase in security spending is authorised.

However, the bill has to pass before 5th June, when the U.S treasury says that it would run out of money to cover all of its obligations. Though the U.S congress is narrowly divided Biden believes that the bill would pass.