THE US Congressional Budget Office said on Tuesday its budget deficit projections would be reduced by about US$1.5 trillion over the next 10 years if the debt ceiling bill now up for a vote in Congress were enacted in its present form.

The projection comes following the debt ceiling deal struck last weekend between Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy. A vote on the deal is expected on Wednesday.

The agreement would suspend the debt limit through Jan 1, 2025, cap spending in the 2024 and 2025 budgets, claw back unused Covid-19 funds, speed up the permitting process for some energy projects, and include extra work requirements for Americans who receive food aid.

“Reductions in projected discretionary outlays would amount to US$1.3 trillion over the 2024–2033 period,” the CBO said on Tuesday, adding the bill would reduce mandatory spending by US$10 billion and revenues would fall by US$2 billion over the decade.

Interest on public debt would fall by US$188 billion, it added.

The bill, if approved by Congress, will prevent the US government from defaulting on its debt and comes after weeks of heated negotiations between Biden and House Republicans. It has drawn fire from both hardline Republicans and progressive Democrats, but Biden and McCarthy are banking on getting enough votes from both sides.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

McCarthy has predicted he would have the support of a majority of his fellow Republicans for the bill, and House Democratic leader Hakeem Jeffries said he expected Democratic support.

The 99-page bill would authorise more than US$886 billion for security spending in fiscal year 2024 and over US$703 billion in non-security spending for the same year, not including some adjustments. It would also authorise a 1 per cent increase for security spending in fiscal year 2025. REUTERS