Democrats and Republicans prepare plan to avoid debt ceiling crisis – 01/22/2023 – Market

A bipartisan group of U.S. lawmakers is preparing a plan to defuse a looming crisis over the country’s debt ceiling, changing it from a fixed dollar amount to a percentage of gross domestic product, the group’s top Republican said on Sunday. .

The proposal would replace Washington’s federal debt ceiling – currently set at $31.4 trillion – with a rule that would limit debt to a share of GDP, said Rep. Brian Fitzpatrick, Republican co-chair of the moderate caucus Problem Solvers Caucus. .

In an interview with Fox News on Sunday with Democratic Problem Solvers co-chair Josh Gottheimer, Fitzpatrick said Republican House Speaker Kevin McCarthy will take the lead in negotiations with the White House on the debt ceiling. . But he and Gottheimer were “putting meat” on the skeleton of their proposal to help avert a crisis.

“Let’s just offer … a possible solution for building bridges,” Fitzpatrick said.

On Thursday (19), the US government came close to its legal borrowing limit. The Treasury Department warned that its extraordinary cash management measures could only allow the government to pay all its bills by early June, at which point the country could risk defaulting on its obligations, including on its government bonds. debt.