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US President Joe Biden could sign the bill regulating the raising of the debt ceiling on Saturday, a government spokesman said.
Now that the Senate has also approved a broader limit, U.S. lawmakers need to work out the final details of the proposal. Once that happens, Biden can sign him almost immediately, according to the White House.
The debt ceiling determines how much the US federal government can borrow. Americans had already exceeded that limit this year and without adjustment, the Treasury Department would run out of money next Monday.
As a result, the United States would no longer be able to pay many benefits, but also, for example, no interest on the public debt. The latter would mean chaos in the financial markets.
Requires Republican Approval
Democrat Biden and Republican Speaker of the House of Representatives Kevin McCarthy had already reached an agreement on the debt ceiling last Saturday. But that deal also had to be approved by the US Congress, where the conservative wing of Republicans in particular believed more cuts were needed.
Now that both houses of the House of Representatives have agreed, an upcoming vote on raising the debt ceiling will only be needed after the 2024 US presidential election.
Splitting can lead to a worse credit score
Raising the debt ceiling is usually a routine task in the United States, but tensions between Republicans and Democrats are making it increasingly difficult. The rating agency Fitch has therefore become more gloomy on the financial health of the United States.
The rating agency now takes into account that the US government’s credit rating will soon be downgraded. Now the United States still has the highest score. A lower score means lending money in the United States is considered riskier, which means Americans may have to spend more on interest rates.
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