According to reports from world news agencies, President Joe Biden has signed a bill that temporarily suspends the debt ceiling rules until early 2025. The White House confirmed this move, stating that without it, the US government would have faced difficulties in meeting its financial obligations starting next week, resulting in a historic default.
Following intense negotiations, the bill was passed by both the House of Representatives and the Senate this week. President Biden, a Democrat, reached an agreement with Republican House Speaker Kevin McCarthy. The passage of this bill ensures that there will not be a similar political battle leading up to the upcoming presidential election.
By signing the bill into law, Biden has effectively postponed the debt ceiling issue that had the potential to create instability in both the US and global economies. The suspension of the debt ceiling rules will remain in effect until January 2025. Additionally, the legislation includes measures to control government spending growth, with a reduction of $1.5 trillion (approximately 33 trillion crowns) over the next decade, cuts to the tax administration’s budget, and stricter conditions for social assistance.
Although the United States has never defaulted on its debts, it came close to doing so in 2011. This year, the deadline for potential default was looming on June 5.
The White House announced the signing of the bill, which took place privately, through an emailed statement. President Biden expressed his gratitude to congressional leaders for their collaborative efforts in tackling this issue.