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Wall Street is keeping a close eye on the debt ceiling deal ahead of the House of Representatives vote on the bill this evening. Will the debt ceiling deal pass?
Well, at the moment, it’s unclear, but things are looking up for the debt ceiling deal. Both Democrats and Republicans will need to come together for the debt ceiling legislation vote to pass. According to House Speaker Kevin McCarthy: “It’s going to become law.”
Investors have been growing undeniably nervous over the past few months as bipartisan negotiations appeared to have broken down several times. Indeed, just two weeks ago, Speaker McCarthy and President Biden halted debt ceiling negotiations due to a lack of progress, fueling fears of an imminent U.S. debt default. It seems, however, things may well take a turn for the better tonight.
“Our bipartisan budget agreement prevents the worst possible crisis: a default for the first time in our nation’s history – an economic recession, retirement accounts devastated, and millions of jobs lost,” Biden tweeted.
Will the Debt Ceiling Deal Pass?
While McCarthy and Biden seem hopeful that tonight’s debt ceiling deal will make it through the House, some lawmakers have scrutinized the heavily adjusted bill.
At a press conference on Tuesday, 11 conservative members of the House Freedom Caucus voiced outrage at the deal, arguing McCarthy had compromised the spending cuts previously included in the bill.
“This deal fails completely,” said Republican Congressman Scott Perry. According to Perry, he and his like-minded colleagues will “be absolutely opposed to the deal and will do everything in our power to stop it.”
The Republicans viewed the debt ceiling deadline as an opportunity to push hot-ticket agenda items, like work requirements for certain social security programs and sweeping spending cuts. While both sides have made concessions, currently, it’s primarily right-wing Republicans who are voicing discontent with the current state of the bill.
“How on Earth is this going to be beneficial?” Republican Representative Chip Roy asked Tuesday.
Debates have already begun on Capital Hill over the future of the debt ceiling deal. With the potential June 5 default date rapidly approaching, the future of Wall Street — and main street — rest on tonight’s vote.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.