Chinanews.com, May 5 -- Even if the new spending limits in the White House's debt deal with Congress reduce borrowing by $31.1 trillion, the U.S. government's deficit will continue to climb to record levels in the coming decades, according to the Associated Press.
The Associated Press said that the two-year "truce" between US President Joe Biden and House Speaker McCarthy is only temporary, after which they will have a more painful showdown on the federal budget.
Infographic: US President Joe Biden speaks. Photo by China News Agency reporter Chen Mengtong
As previously reported, the core elements of the debt agreement include limiting federal spending in 2024 and 2025 in exchange for a solution to the debt ceiling problem until early 2025.
On May 5, the Congressional Budget Office said the government would reduce spending by $30.10 trillion and interest payments by $1 billion over 3 years under the debt deal. The AP said the amount was too small to fully offset the growing costs of Social Security, Medicare and Medicaid.
Some experts argue that the current debt agreement is not sustainable. "This debt deal is crumbling, it becomes a political face agreement, but it doesn't have much substance in changing the trajectory of U.S. debt." Romina Busia, director of budget and welfare policy at the Cato Institute, said.
Previously, Philip Swarger, director of the Congressional Budget Office, had publicly stated that publicly held debt would more than double to 2053% of GDP by 195.
Swager offered 17 policy options to reduce debt, six of which were tax increases that could raise trillions of dollars over 6 years. But raising taxes is unlikely for Republicans, and Democrats have generally shunned reducing benefits.
"The longer the action drags on, the greater the policy changes." Swager warned.