Biden signs agreement to raise the debt ceiling in the US

The President of the United States, Joe Biden, signed the agreement on Saturday achieved between the White House and the Republicans to raise the debt ceiling until 2025, thus preventing the country from going into suspension of payments.

“We are going to continue the work of build the strongest economy in the world“, the president wrote in a tweet, accompanied by a video of him signing the agreement in the Oval Office.

With Biden's ratification, the country will avoid the default that would have occurred as soon as Monday had Congress not reached an agreement to raise the debt ceiling, which sets the limit on how much money the US can borrow and can only be raised or stopped by legislative action.

In an address to the nation this Friday night, Biden noted that suspension of payments "would have been catastrophic" and sent the country into "a recession."

The agreement to raise the debt ceiling in exchange for some caps on public spending was reached last weekend, in a negotiation against the clock Between the White House and House Republicansled by Kevin McCarthy.

The measure suspends the debt ceiling for the next two years, until after the presidential elections of November 2024. Specifically, suspends the current debt limit of $31.4 trillion until January 1, 2025.

In exchange, the agreement reached over the weekend between the White House and the Republicans in the Lower House contemplates, among other things, caps on spending on congressionally funded programs in areas like healthcareeducation, justice or environmental protection.

In parallel, cuts part of the new funds destined to the public Treasury to reassign them to items that are not defense and contemplates the resumption of payments by university students of the debt they have accumulated.

Under that agreement, non-defense spending will remain the same in fiscal year 2024 and will increase 1% in fiscal year 2025.

In addition, tightens the work requirements to access social benefitssuch as food stamps, and rescinds $28 billion of unspent dollars that had been earmarked for pandemic relief programs.

The approval of the agreement in Congress and the subsequent signature of the president it was crucial for the country not to default on its public debtafter the debt ceiling was reached last January, the legal limit to the money that the US can borrow to meet its commitments.