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President Biden Rejects Debt Ceiling Deal Benefiting Crypto Traders

Key Takeaways
  • Biden opposes debt deal benefiting wealthy tax cheats and crypto traders, risking food assistance
  • Proposed deal includes blocking crypto tax-loss harvesting, reducing tax liabilities
  • Republicans reject proposals, seek $4.8 trillion spending cuts; debt default possible by June 1
22-May-2023 By: Simran Mishra
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President Biden Rejects Debt Ceiling Deal Favoring Crypto Traders Over Food Assistance Programs

During a press conference at the G7 Summit in Hiroshima, Japan on May 21, United States President Joe Biden voiced his opposition to a proposed debt ceiling deal put forward by Republican leaders. He expressed concerns that the agreement would favor "wealthy tax cheats and crypto traders" at the expense of food assistance programs. Biden firmly stated that he would not agree to a deal that jeopardizes the well-being of nearly 1 million Americans.

One aspect of the proposed deal that drew criticism from the President is the alleged protection it offers to crypto traders through tax-loss harvesting. This strategy allows investors to offset capital gains from cryptocurrency profits by selling digital assets at a loss. The Biden administration has been engaging in discussions with Republican leaders regarding the possibility of blocking this mechanism for cryptocurrency transactions.

Republicans Reject White House Proposal, Debt Ceiling Crisis Looms as Biden Holds Urgent Call with House Speaker

The White House also presented a similar proposal to Republican leaders that would prevent investors from deferring taxes on real estate swaps. These changes are estimated to generate approximately $40 billion in tax revenue for the U.S. government.

However, Republicans have rejected these proposals, with House Speaker Kevin McCarthy asserting that the increase in U.S. debt is a result of excessive spending by the Biden administration during the pandemic. Republicans advocate for addressing the deficit through $4.8 trillion in spending cuts, which would directly impact federal agencies' budgets.

The debt ceiling issue is of significant concern, as failure to raise it could lead to a default as early as June 1. In response to the urgency of the situation, President Biden intends to hold a phone conversation with House Speaker McCarthy during his flight from Hiroshima to Washington, D.C.

The debt ceiling, established in 1917, represents the limit set by Congress on the amount of money the federal government can borrow to meet its financial obligations. 

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