President Biden and House Speaker Kevin McCarthy (R-Calif.) have reached an “agreement in principle” to raise the debt ceiling and reduce federal spending.
Now Kevin merely has to find the magical powers needed to obtain a majority of Congressional House members to vote for the agreement he has negotiated.
Conservatives on Saturday appeared on the verge of revolt as McCarthy failed to meet all of their many demands.
During the previous House-led hostage crisis in 2011 the US Treasury did not default, but the debate alone still sank the stock market and brought about a rare downgrade in U.S. credit, raising the risk that hard-fringe Republicans’ renewed sense of brinkmanship will still carry its own economic consequences.
The agreement will reportedly keep spending “roughly flat” at federal health, education, science, labor and other domestic agencies, which would see a 1 percent increase in 2025.
McCarthy rejected any repeal of Trump's signature tax cuts which created much of the new debt but instead agreed to offset Republican demands for 50% budget cuts by redirecting money set aside to help the IRS pursue unpaid taxes, which Republicans long have opposed as an infringement of their personal financial freedom.
We've run out of other people's Social Security taxes needed to subsidize our low income tax rates.
