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US debt ceiling bill set for tight vote

US debt ceiling bill set for tight vote

The US House of Representatives is scheduled to vote Wednesday on a bill to raise the $31.4 trillion public debt ceiling, a critical step to avoid a default that could occur early next week without the congressional action.

Republicans control the House by a narrow 222-213 majority, but the bipartisan deal will need both their support and that of Democrats to pass, as members of both parties oppose significant parts of the bill.

Republican Kevin McCarthy predicted the afternoon vote would be successful, telling reporters: “It’s going to become law”.

For his part, President Joe Biden underscored what is at stake in case of failure, saying on Twitter: “Our bipartisan budget deal averts the worst possible crisis: a first-time default in our nation’s history, an economic downturn, devastated retirement accounts, and millions of lost jobs.”.

Wall Street’s main indexes opened slightly lower on Wednesday as investors awaited the outcome of the vote.

Late on Tuesday, the House Rules Committee, in the first procedural vote on the controversial legislation, cleared the measure for debate on the full House floor.

The legislation would suspend the US debt limit until January 1, 2025, allowing Biden and lawmakers to shelve this politically risky issue until after the November 2024 presidential election.

It would also limit some public spending over the next two years, speed up the permitting process for some energy projects, recover unused COVID-19 funds, and expand work requirements for food aid programs to new recipients.

The Treasury Department has warned that it will not be able to cover all of the government’s obligations by Monday if Congress does not raise the limit.

Late on Tuesday, the nonpartisan Congressional Budget Office said the law would save $1.5 trillion over a decade.

A favorable vote in the House would send the bill to the Senate, where the debate and vote could drag on into the weekend, especially if any of the 100 senators try to stop it from passing.

Source: Reuters

Source: Gestion

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