A law to raise the US national debt ceiling could have been a catastrophic payment default which will affect the most vulnerable sectors of the US economy.

Although U.S. President Barack Obama included certain adjustments to the health plans for the elderly and a change in the tax code so that the rich pay more, it was still uncertain whether Republicans would accept the latter condition.

The new regulation could overwrite the rules on agricultural subsidies, fiscal management of land and new-generation biofuels, also promoted by the Obama government.

US Debt paralyzes White House

Negotiations on the debt ceiling and the deficit reduction issues paralyzed other processes on the White House agenda and materialized the Republicans’ stance of holding up everything that could favor Obama’s re-election plans.

From now on, any initiative, such as the approval of free trade agreements with Colombia, Panama, and South Korea, or immigration reform, will have to wait until September, after the congressional recess that begins this weekend.

Reducing Us Deficit : Reforms are required

The plan to reduce the deficit, which would include a tax reform for the rich to pay their fair share, as requested by Obama, is eseentially a long-term solution.