Kevin McCarthy will continue negotiations with President Joseph Biden’s Administration based on a plan to increase the sovereign debt threshold by 1,500 billion dollars, but he wants the limitation of discretionary budget expenditures at the level of fiscal year 2022, the 1% cap on the increase in the budget deficit, the reactivation of funds unspent during the pandemic and the rejection of the law on funding intended for the Internal Revenue Service (IRS).
Also, McCarthy wants to suspend the facilities approved by President Biden regarding loans for public higher education and cancel the tax credits granted by the Inflation Reduction Act.
Officials within the Republican Party cited by the CNN television station stated that the plan to increase the threshold of the sovereign debt of the United States would remain in force until March 31, 2024.
The plan is due to be voted on in the House of Representatives next week and, depending on the unity of Republican congressmen, could be approved, but will likely be rejected if it reaches the Senate, where the Democratic Party politicians will find the sovereign debt facilities insufficient and unacceptable the conditions for reducing expenses.
The Treasury Department in Washington has warned several times that the United States could default in the second half of 2023 if the sovereign debt threshold is not raised to allow new foreign loans to be contracted.
According to the estimates of the Congressional Budget Office, the United States would reach a budget deficit of 1.4 trillion dollars in 2023.
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