The debt ceiling crisis is nearly over, but we’re not out of the woods yet. The deal needs to pass both Congress and the Senate,
Key takeaways
There’s an agreement in principle in place between President Biden and Speaker McCarthy
Neither Republicans or Democrats are happy – the deal needs to pass through the Congress and the Senate, so it’s not set in stone
The markets are surprisingly blasé about the crisis, futures are all up on Tuesday morning
The debt ceiling crisis is nearly over, but we’re not out of the woods yet. It wasn’t a restful long weekend for President Biden and Speaker McCarthy, as the two hammered out the final details on the debt-ceiling deal and have tentatively reached an agreement in principle.
The problem now is that the deal needs to pass both Congress and the Senate, with neither side happy at the end result. They may need to swallow their pride for the good of the global economy, which would end up tanking if the U.S. was to do the unthinkable and default for the first time ever. Let’s get into the details.
The AI scans through the data to find the top-performing securities, precious metals and commodities for that week that are matching or beating high inflation. It then dynamically updates the Kit’s holdings to help you make the most of your investment and stay one step ahead.What’s the latest on the debt-ceiling crisis?
Last week the Treasury Secretary, Janet Yellen, revised her previous deadline from the 1st June to the 5th – but that’s still not a lot of extra time to make sure the deal passes in Congress and the debt repayments go through in time, so saying it’s all down to the wire is an understatement.
What’s now on the table is a two-year limit on the non-defense budget, which includes spending staying flat next year and then raising 1% in 2025. The U.S. TANF program will see changes to who qualifies for the support and SNAP is also going to have more disqualifications – both of these are likely to dominate the headlines. $30 billion worth of unspent Covid funds are being returned, but Medicaid is untouched.
The IRS is losing some funding – $20 billion, to be precise. Defense spending is set to increase to $886 billion, equivalent to a 3% rise this year, which President Biden was after as the Russia-Ukraine conflict rages on.
