It seems that a default could be avoided for the United States, but just barely.
President Joe Biden and Speaker of the House Kevin McCarthy, having met virtually on Thursday, are reportedly nearing an agreement to raise the debt ceiling for two years. They are, according to sources quoted in Reuters, set to do that in tandem with capping non-discretionary spending at current levels and boosting military and veteran spending.
Per sources, the final deal would specify the total amount the government could spend on certain programs but not break that down into individual categories. The two sides are just $70 billion apart on a final total that would apparently exceed $1 trillion.
In particular, the White House is apparently thinking of rolling back its plan to boost IRS funding in a bid to hire auditors and target wealthier Americans. An anonymous source says that the issue remains one where President Biden is determined to maintain his priorities.
The amount of time left for Congress to act is unclear, but still running out quickly. June 1st has been cited by the Treasury Department as the deadline before a default, though it said on Thursday it would sell $119 billion worth of debt that will come due on that date.
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