US President Joseph Biden and House Republicans reached an agreement to raise the debt ceiling until January 2025 in exchange for spending limits for the next two years. However, the measure may not be enough to guarantee a stable economy, consequences that Americans would have to pay.
This was stated by specialists during a press conference organized by Ethnic Media Services, in which they carried out an analysis on the subject and explained how the country's economy is affected or benefited.
The agreement comes at an important moment for the president's political figure. By managing to unite forces between the parties, Biden seeks to score points for the Democratic wing and make a good impression ahead of the next elections that will take place in 2024, where he seeks re-election. However, the issue must go far beyond politics and focus on people.
The debt ceiling is set by Congress and is the maximum amount that can be borrowed to finance government obligations that have already been authorized. When a budget deficit occurs or when the revenue collected is considered insufficient, the ceiling is raised to avoid default.
Rachel Snyderman, deputy director of business and economic policy at the Bipartisan Policy Center, expressed concern about the agreement's negotiation due to the list of priorities and the reductions that will be applied mainly to social programs, so she recommended looking for new sources of income that do not affect citizens.
«The bill also failed to look at new ways to generate revenue, we have a very large deficit and the bill is not doing anything to address that part. It is time for legislators to do something to generate revenue without considering taxes and then focus only on spending. discretionary which is a small part of the budget", the economist stressed.
To Snyderman said that raising the debt ceiling is not enough, since it has been requested many times and in the end those affected are the citizens. Therefore, he proposed looking for other ways to raise taxes, such as making procedures easier for companies and thus attracting investment that generates more jobs, or considering the immigration to obtain new income.
For Americans, having debt is worrisome. Interest costs become a government problem and social programs on which millions of families depend are no longer financed.
Shannon Buckingham said that the issues at stake include the broad negative effects on the economy, a situation that citizens are well aware of because they know they will be affected and their benefits may be delayed.
«This agreement cuts part of the budget that covers education, job training, housing, food security and many areas of funding that are necessary investments for people, mainly for the less favored communities.", he pointed out.
Lindsay Owens, executive director of Groundwork Collaborative, said the decision to raise the debt ceiling is necessary to sustain the country's economy and avoid default, which would lead to further economic problems.
However, he agreed that inflation will affect the financing of resources and that there will continue to be an economic loss for Americans.
«The increase will be reflected in cuts due to inflation, even if they freeze funding. In a world where inflation is 4 to 5 percent, inflation eats up that part first and then there are 4 or 5 percent fewer resources available. That's 5 percent less for housing, we will see less resources for assistance in programs for children and seniors. It's important to understand that this extra funding will not cover the effects of inflation.", he pointed out.
The measure approved on Friday has generated many political opinions, however, the issue of the country's economy involves the pockets of all citizens, so the debt ceiling should not be politicized among parties and personalities.
The experts concluded that it is necessary to examine and analyse the measures taken, and how, since the debt ceiling was created more than a century ago, money has not been raised in any other way, thus continuing to affect the most vulnerable.
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