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US debt limit deal would reduce deficit $1.5 trillion over next decade: Report

01 June 2023 00:21 (UTC +04:00)

A deal that would raise the US debt ceiling and limit government spending would reduce the federal deficit by $1.5 trillion in the next 10 years, according to a report by the non-partisan Congressional Budget Office (CBO), APA reports citing AA.

"Reductions in projected discretionary outlays would amount to $1.3 trillion over the 2024–2033 period," the CBO wrote in a letter sent Tuesday to House of Representatives Speaker Kevin McCarthy.

"Mandatory spending would, on net, decrease by $10 billion, and revenues would, on net, decrease by $2 billion over the 2023–2033 period,” it said. “As a consequence, interest on the public debt would decline by $188 billion.”

The estimates come as lawmakers are preparing to vote on a bill in the House later Wednesday.

President Joe Biden urged Congress on Sunday to pass a bipartisan deal he reached with McCarthy to raise the nation's debt ceiling, which aims to avoid the US defaulting on its debt obligations.

If Congress fails to reach a deal, the government will be unable to pay its bills, which could happen in less than one week.

Treasury Secretary Janet Yellen warned Friday in a letter to McCarthy that her agency will not have enough resources "to satisfy the government's obligations if Congress has not raised or suspended the debt limit by June 5."