$24 trillion.. Losses will hit America if the deal to raise the debt ceiling collapses

US President Joe Biden and House Speaker Kevin McCarthy have reached agreement on a deal to raise the country's debt ceiling.

The procedure may encounter procedural hurdles, which complicates the race to avoid an unprecedented stumbling block.

The first test of the legislation comes Tuesday when the bill goes before the House Rules Committee (made up of nine Republicans and four Democrats), which serves as guardian of upcoming House legislation.

This means that bipartisan support will be needed to win congressional approval before the government is expected to default on June 5th.

Debt ceiling agreement

1- The debt ceiling agreement will suspend the borrowing limit for two years.

2- Limit government spending during that period.

3- This would reduce spending on domestic priorities favorable to the Democrats while increasing military spending by about 3 percent.

4- Expanding food assistance to some beneficiaries to get them to find jobs, and environmental reviews of energy projects will be accelerated.

Over the weekend, White House officials polled Democrats on Capitol Hill to brief them on the agreement, while McCarthy touted the bill to conservatives as a beneficial spending reform.

Avoid default

"I feel good about that," Biden told reporters Monday. "There is no reason not to," he added, to avoid default.

In both houses (the Senate and the House of Representatives), vocal opponents of the bill can slow its passage.

Some conservatives in both chambers have said they would oppose the deal because it does not go far enough to limit federal spending, while some progressives see the spending restrictions as too severe.

McCarthy was also confident during his remarks at the Capitol: "At the end of the day, people can work together to be able to get through this."

McCarthy told reporters at the Capitol on Sunday that the agreement "doesn't get everything everyone wants," but that was to be expected in a divided government. While in the back lanes, he told lawmakers on a conference call that Democrats "got nothing," CNBC reported.

But McCarthy has only a slim Republican majority in the House of Representatives, and hard-right conservatives may resist any deal as insufficient as they try to cut spending. By compromising with the Democrats, he risks losing the support of his members, and setting up a difficult moment in the life of the new Speaker.

In fact, two of the conservative Republicans on the committee, Rep. Chip Roy of Texas and Ralph Norman of South Carolina, have said they oppose the deal.

On the other side, a group of 100 moderates in the New Democratic Coalition made a decisive gesture of support, saying in a statement that they were confident that Biden and his team "presented a viable, bipartisan solution to end this crisis" and were working to ensure the agreement had support from both sides.

The government may run out of money

Treasury Secretary Janet Yellen said the government could run out of the money it needs to pay its bills on time on June 5 unless Congress takes action. While the failure of the United States to pay its bills on time could have widespread consequences, reaching an agreement would likely mitigate the damage done to Congress by not having a deadline.

Serious consequences

In the United States, a default could freeze financial markets and trigger an international financial crisis. Analysts say:

1- Millions of jobs will disappear

2- Borrowing and unemployment rates will rise

3- A stock market downturn is wiping out trillions of dollars of household wealth.

4- This will crash the $24 trillion Treasury bond market.

The agreement came after Yellen told Congress that the United States could default on its debt obligations by June 5 - four days later than previously expected - if lawmakers did not act in time.

Raising the country's debt limit, which is now $34.38 trillion, allows for more borrowing to pay insurance bills.