US debt ceiling deal advances to Senate

Decided between Democratic President Joe Biden and Republicans in the chamber, the measure suspends the debt ceiling until 2024, slightly cutting government spending next year.

“Passage is a crucial first step in getting America back on track,” said House Speaker Kevin McCarthy, the top Republican in Congress. “Do what is responsible for our children, what is possible in a divided government, and what our principles and commitments require.”

Biden hailed the 314-117 approval as “a critical step” in protecting the country’s economic recovery from the pandemic, achieved through a “bipartisan compromise.”

The Republican majority in the chamber needed the help of dozens of Democrats to fend off a right-wing rebellion – 71 conservatives voted against – and advance the agreement to the Senate, where Democrats are the majority.

McCarthy supporters had spent the last few hours in a frantic search for votes, while the highest-ranking Democrats promeThey had to believe that their members would put the country's finances above the temptation to harm their opponents.

Hostage country

The vote came after weeks of arduous negotiations between Biden and McCarthy, with Democrats accusing Republicans of holding the US economy “hostage” by insisting on spending cuts to keep up with raising the debt ceiling.

The bill suspends the debt ceiling until 2025, enough to get through the 2024 presidential election period. In exchange, some expenses are limited so that they remain stable – except military expenses – in 2024 and the increase is limited to 1% until 2025. It also foresees a reduction of 10 billion dollars (50,5 billion reais) in funds allocated to the tax authorities to modernize and intensify controls throughout the country.

McCarthy's office explained that the agreement provides for the recovery of “billions of dollars in resources intended to combat the covid pandemic that were not spent”, without revealing details. One of the points of contention involves changes in the requirements for access to some social benefits.

Understand the agreement to increase the American debt ceiling

After several days of negotiations, United States President Joe Biden and Republicans reached an agreement to raise the country's debt ceiling and avoid a catastrophic default. Below are the key points of the agreement, which needs to be approved by both chambers of a divided Congress, in a vote to be held next Wednesday.

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