The House of Representatives voted 50 to 49 in favor of increasing the debt limit by $2.5 trillion (about €2.2 trillion). President Joe Biden’s Democrats voted unanimously in favor of the measure, while Republican opponents, who lost a senator, voted unanimously against it. The agreement has yet to be approved by the House of Representatives, and this has been planned for the next few hours. Democrats have a majority in the House.
Treasury Secretary Janet Yellen had previously warned that if the debt ceiling was not raised, the United States would face bankruptcy on Wednesday. This could have had a devastating effect on the US economy and financial markets. A default in the world’s largest economy could lead to a global financial crisis and economic downturn.
The government’s debt ceiling was last at $28.9 trillion, according to the Congressional Budget Office. With the new debt, there is an upper limit of $31.4 trillion – far more than a year’s US economic output.
In October, the US Congress approved $480 billion in new debt to allow more time for a long-term resolution.
“Americans can take a deep breath and make sure there’s no default,” Senate Majority Leader Chuck Schumer said after the vote to reporters. “No playing with fire, no delays in debt payments, no danger of a new recession – good governance has triumphed on this very important issue.”
Republicans talk about irresponsible fiscal policy
Republicans accuse Biden, who also wants a trillion-dollar package for social and climate protection, after a trillion-dollar package of social infrastructure, of having irresponsible budget policy. However, Democrats argue that increasing the debt ceiling is necessary in particular because of the budget policies of Biden’s predecessor Donald Trump. You accuse the opposition party of wanting to exploit the issue politically in preparation for the midterm congressional elections next year.
se / rb (afp, ap, dpa)
“Tv expert. Hardcore creator. Extreme music fan. Lifelong twitter geek. Certified travel enthusiast. Baconaholic. Pop culture nerd. Reader. Freelance student.”