US House of Representatives approves debt limit bill

The US House of Representatives has approved a bill that would prevent the country from defaulting by increasing the debt limit. The bill, which was agreed upon after lengthy negotiations between the White House and Republicans, was passed in the House of Representatives by 314 votes to 117. US President Joe Biden said in a written statement after the bill passed the House of Representatives, “Tonight, the House of Representatives took a critical step to prevent our first default and protect our country’s hard-won and historic economic recovery.” Stating that the budget agreement in question was a bipartisan compromise, Biden noted that both sides did not get everything they wanted in the negotiations. Biden said, “I urge the Senate to pass the bill as soon as possible so that I can sign it and our country can continue to build the strongest economy in the world.” The bill’s next stop is the US Senate The bill, which provides for the suspension of the debt limit until January 1, 2025, will be the US Senate. If it passes the Senate, the bill will be submitted to President Biden for signature to become law. Thus, by increasing the debt limit, the federal government will be prevented from running out of cash and entering default. It could save $1.5 trillion over 10 years The bill, which in addition to suspending the debt limit would also cut spending for some federal programs, also plans to impose new work requirements on beneficiaries of some government assistance, including food assistance programs. The bill envisages the recovery of unused aid money provided during the Covid-19 pandemic. The bill also aims to speed up the permitting process for some energy projects. According to an assessment published by the US Congressional Budget Office (CBO) on the impact of the bill on the federal debt and budget deficit, if the law is passed and the appropriations subject to the cap are implemented as planned, the budget deficit is expected to decrease by approximately $1.5 trillion over the next 10 years. The debt limit must be increased by June 5 The US reached the debt limit of $31.4 trillion on January 19, and the US Treasury began taking extraordinary measures to avoid exceeding the limit and prevent a possible default. The Treasury Department had warned that these extraordinary measures could run out at the beginning of June. In her latest letter regarding the debt limit to US House Speaker Kevin McCarthy, US Treasury Secretary Janet Yellen stated that based on current data, it is estimated that the Treasury will have insufficient resources to meet its obligations if Congress does not increase or suspend the debt limit by June 5. The US Treasury's cash level fell to $38.8 billion as of May 25, the lowest level since 2017, while debt limit negotiations were ongoing.