WASHINGTON, May 30 (Reuters) – The US Congressional Budget Office said on Tuesday that its budget deficit projections over the next 10 years would be cut by about $1.5 trillion if the debt ceiling bill now due to be voted in Congress , would be adopted in its present form .
The projection comes after the debt ceiling agreed came between Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy last weekend. The deal will be voted on Wednesday.
The agreement would suspend the debt limit until January 1, 2025, limit spending in the 2024 and 2025 budgets, reclaim unused COVID funds, speed up the permitting process for some energy projects and include additional work requirements for Americans receiving food aid.
“Reductions in projected discretionary spending would amount to $1.3 trillion over the 2024-2033 period,” the CBO said adding the bill would reduce mandatory spending by $10 billion and cut revenues by $2 billion over the decade.
Interest on the national debt would fall by $188 billion, it added.
The bill, if passed by Congress, will occur the US government of defaulting on its debt and comes after weeks of heated negotiations between Biden and House Republicans. It has drawn fire from hardline Republicans and progressive Democrats alike, but Biden and McCarthy are counting on enough votes from both sides.
McCarthy has predicted he would receive the support of a majority of his fellow Republicans for the deal to lift the $31.4 trillion US debt ceiling, and House Democratic leader Hakeem Jeffries said he expected Democratic support.
The 99-page bill would approve more than $886 billion for security spending in fiscal year 2024 and more than $703 billion in non-security spending for the same year, not counting some adjustments. It would also allow a 1% increase in security spending in fiscal year 2025.
Reporting by Kanishka Singh and Jasper Ward; Edited by Sonali Paul and Christopher Cushing