Democratic President Joe Biden and Republican House Speaker Kevin McCarthy are nearing an agreement that would raise the federal borrowing limit for two years while capping public spending on most categories of spending beyond the military and veterans during the same period, a government official said.
The White House is also considering making the concession to reduce funding to the Internal Revenue Service (IRS) in order to tighten checks on higher-income citizens under the deal, according to the same source.
In another development, Fitch Ratings on Thursday downgraded the credit outlook of mortgage and real estate giants Fannie Mae and Freddie Mac as White House negotiations with the Republican opposition to raise or suspend the federal borrowing limit continue without a deal as a June 1 deadline looms, after which Treasury Secretary Janet Yellen warns the US could declare default.
Last Wednesday, the same house downgraded to negative the outlook for the credit of the American government itself – it is in the AAA level, the highest -, due to the absence agreement between President Joe Biden and the Republicans.
Source: APE
