America, which is seen as Big Brother as the world is experiencing an unusual scene. Like how democratic nations see issues between the ruling party and the opposition party, America also has the same trend. Two parties are crucial there. The democratic party is in power, while Kevin McCarthy, who is from the Republican Party is serving as the Speaker. The Biden government must increase the debt ceiling. The speaker should give the green signal to this. Though Democrats are in power, people from the opponent party are in key positions so their opinion is key now.
In the tough situation, American President Joe Biden and Speaker Kevin McCarthy held meetings in the White House. However, the meetings did not give any positive outcomes. There is a space for unusual political consequences now. If the debt ceiling is not increased in 10 days(by June 1), then the salaries and pension benefits of government salaries cannot be paid. Even the payments for bonds cannot be paid. If this happens, then not just America, but the whole world might fall into recession.
Now it has become a big task for the Joe Biden government how to overcome the situation. While the Republicans have a majority in the lower house of the American Parliament (Congress), Democrats have a majority in United States Senate. As the Republicans have a big majority in the lower house and the speaker is from the party, tough consequences would prevail if they wonâ€™t agree to increase the ceiling. The Secretary of the Treasury Janet Yellen warned Congress about this in her recent letter.
The Republicans are demanding that money should be saved by cutting one percent from the annual budget allocations. However, Joe Biden who is from the Democrats is saying that if a 2023-like budget will be continued in 2024 as well. However, he promised that the budget expenditure for 2025 will not be increased by more than one percent.
Democrats say that if the defence.. Non-defence Expenditures are stopped as done with 2023, around 9,000 crore dollars can be saved and one lakh crore dollars can be saved if the idea is implemented for ten years. As part of this, Joe Biden is planning to address the budget deficit by increasing taxes on rich people and big companies. However, Speaker is saying no to this.
The differences of opinion is not restricted to just this. The same is the case with many other things. While Republicans are demanding that health insurance should be given to those who work at least 20 hours a week, the Democrats are saying something else. They are arguing that health insurance should be given to everyone irrespective of their working hours. Republicans are saying that Democrats should change their opinions if the American govt is allowed to go for the debt ceiling. But Democrats are not ready for this. June 1 is the deadline to see if any unusual consequence takes place or not. Let us wait and see.