Budget – US Republicans: Proposal to raise the debt limit – Economics

WASHINGTON (AP) — The Speaker of the US House of Representatives, Kevin McCarthy, has put forward his proposal to raise the debt ceiling. Accordingly, the Republican in Parliament said yesterday that the increase in the debt limit must go hand in hand with cutting government spending.

The state budget must return to the level of 2022, when expenditures must increase by no more than one percent annually. For example, inflation will be reduced. He also called for deep cuts to US President Joe Biden’s investment and climate protection programme. Biden said yesterday in a speech in Maryland that McCarthy’s plans will primarily harm socially disadvantaged Americans.

McCarthy’s proposal signaled the next round in the row over raising the debt limit. The Republican accused Biden of ignoring the “debt crisis” and called on the president to negotiate to avoid default. Biden said he’s ready to talk about the draft budget. However, Democrats under Biden’s leadership have long called for raising the debt limit independent of budget negotiations.

In the United States, Congress sets debt ceilings at irregular intervals, thus limiting the amount of money the country can borrow. The cap to date is around 31.4 trillion US dollars (about 29 trillion euros). Meanwhile, the applicable debt ceiling has been reached in the USA and the Treasury Department has to make reallocations, among other things, so that the government can pay its bills. If there is no agreement, there could be a risk of default between July and September, according to the independent US Congressional Budget Office.

© dpa-infocom, dpa: 230420-99-379160/4