America anxiously waits for Congress to prevent bankruptcy

According to Reuters, the parties agreed to temporarily suspend the $31.4 trillion debt ceiling until January 1, 2025, so the government can borrow money to pay expenses. In return, non-defense government spending in fiscal year 2024 will remain at current levels and increase by a maximum of 1% in 2025.

New work requirements will be imposed on food stamp recipients. The administration will also end student loan forbearance by the end of August. President Joe Biden’s plan to cancel $430 billion in student debt is unaffected because it is awaiting a Supreme Court decision. The agreement also clears the approval process for some energy projects, recovers unused Covid-19 relief funds, and creates a mechanism to force agencies to save money before taking actions that affect revenue and spending.

In an announcement at the White House early this morning, President Biden said the deal helps dispel the threat of default, while affirming that he has not given too much away. The leader called on the House and Senate to quickly pass the deal to "fulfill their duty and build the strongest economy in the history of the world."

On the Republican side, some say it is more of a political victory than a substantive one, as it does not address the underlying causes of the budget deficit. Mr. McCarthy acknowledged that it did not meet all the demands, but predicted that a majority of Republicans would pass the deal. "And with Mr. Biden's support, I expect his party to support it," Mr. McCarthy said.

ABC News reported that both the White House and House leaders are working to communicate and explain the deal to lawmakers to gain the necessary support. The House is expected to vote on May 31. Meanwhile, in the Senate, any member can block the vote for several days. However, with the support of the Senate's bipartisan leaders, it is likely that there will be enough 60 votes to override any potential delaying efforts. The Senate could vote on the deal on June 2 or later this week, before the June 5 deadline that the Treasury Department has warned puts the debt at risk.

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