US President Biden, Republican McCarthy closing in on deal that would raise govt’s 31.4 trillion dollar debt ceiling for 2 years

United States President Joe Biden has said, progress has been made in talks with top congressional Republican Kevin McCarthy over the US debt ceiling. The pair aim to reach a deal on raising the government borrowing limit for two years so it can keep paying its bills. A US debt default – with a 1st of June deadline looming, would upend the economy and have a global impact.

As per media reports, a US official has said, President Biden and Republican McCarthy are closing in on a deal that would raise the government’s 31.4 trillion dollar debt ceiling for two years while capping spending on most items. The official said, the deal, which is not final, would increase funding for discretionary spending on military and veterans while essentially holding non-defense discretionary spending at current year levels. Republicans are seeking spending cuts in exchange for raising the 31.4 trillion dollar cap on government borrowing.

The debt ceiling is a spending limit set by Congress that determines how much money the government can borrow – an issue on which Democrats and Republicans disagree. With no deal yet struck, the Treasury has warned that the United States will not have enough money to pay all of its bills as soon as the 1st of next month. Analysts say there could be severe economic consequences if the US fails to honor its obligations.