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What is the U.S. debt ceiling and why it’s important

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The United States’ national debt is set to default on Thursday.

In a letter sent to lawmakers, U.S. Treasury Secretary Janet Yellen warned that the U.S. is expected to hit its $31.4 trillion debt limit this week.

Congress is working on the issue, but it remains to be seen if lawmakers on Capitol Hill will actually raise the debt ceiling.

The debt ceiling is the amount of money the U.S. is allowed to borrow to pay for its vast commitments.

Basically, in the U.S., the debt ceiling or debt limit is a legislative limit on the amount of national debt that can be incurred by the U.S. Treasury.

This limits how much money the federal government can pay on the debt they already borrowed.

Currently, the U.S. government borrows large sums of money in order to cover all of its expenses. However, decades ago, Congress created the debt ceiling in an effort to avoid having to approve each new debt individually.

Since then, lawmakers have raised the debt ceiling dozens of times. When this happens—Congress allows the government to take on enough debt to settle the spending obligations it has already made.

If Congress is unable to raise the debt limit in time, the U.S. can only use incoming cash to pay its current commitments which in effect would create a large deficiency.

This is the first debt limit fight since Republicans took control of the House. So far, House Speaker Rep. Kevin McCarthy has signalled that he might leverage the negotiations in order to secure deep spending cuts.

But President Joe Biden and a Senate controlled by Democrats strongly oppose spending cuts.

Veronica Dudo is the U.S. Correspondent for Ticker News covering America’s biggest headlines. As an Emmy® Award nominated global journalist, Veronica has traveled across the country and around the world reporting on historical events that connect all citizens. Lauded as an award-winning international journalist, Veronica has executed stellar news coverage for NBC News, CBS News, The Hill, ME-TV Network and AOL. Her stories have highlighted a plethora of topics ranging from breaking news and politics to economic affairs across the USA, European Union, and Asia; cultural affairs; globalization; governance; education; and sustainability.

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“The state of the union is strong”

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U.S. President Joe Biden delivers his second State of the Union address to a joint session of congress

U.S. President Joe Biden has delivered his second State of the Union address, sparring with Republicans and appealing for bipartisanship.

With the sitting president eying off the possibility of running for a second term in office, he needs to deliver real change and get the public back on side.

In a show of unity, Biden began his address by congratulating the incumbent House Speaker, Kevin McCarthy.

This is the first time Biden has addressed a GOP-controlled House.

The theme of today’s speech was certainly optimism for the future.

Biden trying very hard to convince the American people his administration is equipped to lead the nation through these turbulent economic times.

Economic uncertainty

The country’s economy was front and centre, with Biden noting it has recovered more quickly from the Covid-19 pandemic than many other major markets.

Inflation’s at a record high, and while it’s beginning to cool after hitting 9.1 per cent, Americans aren’t feeling the impact just yet.

In fact, only only 21 per cent of residents rate the current economic conditions as positive.

Biden’s legislative achievements were front and centre

Biden’s legislative achievements include a sweeping health and climate package, an infrastructure law and investments in the semiconductor industry.

All federal infrastructure projects will need to have materials which have been made in America.

Biden says his economic plan is about investing in places and people that have been forgotten.

The president believes too many people have been left behind.

Biden took aim at big business

As America suffers through an energy crisis, the president says oil companies have pocketed $200 billion in profits.

He says corporations should do the right thing.

Climate change was also addressed

Biden has promised to build new storm resistant power grids, roads, electric vehicle infrastructure, while providing tax credits for residents who want to purchase their own EV.

When it comes to global warming – Biden wants to “finish the job”.

Taxing the rich

Biden reiterated his promise not to tax anyone who earns under 400,000 a year.

“No billionaire should be paying a lower tax rate than a school teacher or a firefighter,” he said.

When it comes to the debt ceiling, Biden warned Republicans not to attempt to cut social security or medicare benefits.

The U.S. hit the debt ceiling set by Congress in January, forcing Treasury to start taking extraordinary measures to keep the government paying its bills.

House Republicans say they will only lift the borrowing if the government introduces spending cuts.

“Folks – as we all apparently agree, Social Security and Medicare is off the books now, right? They’re not to be touched,” Biden said. “We’ve got unanimity!”

“Let’s all agree, and apparently we are, let’s stand up for seniors,” he said. “Stand up and show them! We will not cut Social Security; we will not cut Medicare.”

He added: “If anyone tries to cut Social Security – which apparently no one is going to do – I’ll stop them. I’ll veto it.”

Police brutality

Perhaps unsurprisingly, safety and police brutality were featured in the address.

Biden made a point of acknowledging the parents of late Tyre Nichols.

29-year-old Nichols was beaten to death by police officer in Memphis.

His death has renewed calls for police reform and reignited a national conversation on justice in policing.

Biden’s message: “They must be held accountable”.

Gun reform and abortion rights

Biden reignited calls for gun reform – calling for a ban on assault weapons.

It follows the recent mass shooting in Monetary Park, California.

Abortion rights are a hot topic in the United states.

The U.S. Supreme Court overturned Roe v Wade in late June 2022, repealing a nationwide protections for the procedure which were put in place 50 years ago.

If Congress attempts to pass a national ban on abortion, Biden says he will veto it.

The infamous Chinese balloon was also mentioned.

Biden says it’s never a good move to bet against America.

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U.S. President Joe Biden calls for bipartisanship

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Biden faces his classified documents scandal and investigations led by House Republicans into the border crisis and alleged corruption by the Biden family

All eyes will be on U.S. President Joe Biden as he delivers his State of the Union address to a joint session of Congress on Tuesday evening.

The speech will be before a new Congress and a new House Speaker, Kevin McCarthy, who will be sitting behind Biden.

This address comes as Biden is facing his classified documents scandal and investigations led by House Republicans into the crisis at the border and alleged corruption by the Biden family.

The Biden administration continues to face sky-high inflation and gas prices, an ever-growing border crisis, a national deficit and according to new polling a majority of American say they’re living paycheck-to-paycheck.

Another headline that has captured the spotlight is Biden’s handling of the infamous Chinese spy balloon with criticism levelled against the President for allowing the spy craft to enter U.S. airspace and travel across the country for a solid week.

Currently, the U.S. Navy is using sonar equipment to collect debris from the Atlantic Ocean from the spy craft and transporting it to an FBI lab for analysis.

It remains to be seen if the President will speak about this international incident or express a harder line against China.

Following President Biden’s SOTU, newly-elected Arkansas Gov. Sarah Huckabee Sanders has been tapped to deliver the Republican response.

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Death toll from Turkiye-Syria earthquake passes 7,500

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Bodies of people killed in the earthquake in southern Turkey on Monday are being left out on the street as the hunt continues for survivors

The United Nations believes thousands of children may be among the dead.

There was a 7.8 magnitude quake on Monday before a later tremor that was nearly as big.

Overwhelmed rescuers are struggling to save people trapped under the rubble.

Around 70 countries are sending aid to Turkiye, but there is growing anger in some places that help is not arriving fast enough.

This comes as Turkish President Recep Tayyip Erdogan announces a three-month state of emergency in the 10 provinces worst affected by the earthquake.

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