The United States House of Representatives on Tuesday decided to extend the government’s borrowing authority until early December, averting a first default next week when the United States announced it would run out of debt. money to pay their bills.
The House vote to increase the total existing debt by $ 28.4 trillion to $ 480 billion through December 3, after Senate approval last week, would send legislation to President Joe Biden for his signature awaited.
As Congressional votes and Biden’s endorsement resolve the immediate financial crisis for the government, Democrat-controlled Congress and the White House have yet to agree on how to approve a long-term expansion of the government. borrowing authority, perhaps until most of 2022.
Senatorial Minority Leader Mitch McConnell won enough votes from fellow Republican Senators last week to help Democrats embrace the expanded borrowing power in the short term, but said he would no longer do so at the approach of the December deadline.
McConnell called on Democrats to approve the debt ceiling themselves through a legislative process known as reconciliation, for which they would need no Republican support. But Democrats say the process is cumbersome and time consuming, making it unclear how they will try to increase borrowing authority in December.
The United States, almost alone among the world’s governments, has a debt ceiling, which it has adjusted about 70 times since 1965, either increasing it to a specific number or suspending it for a year or two. . The United States needs to borrow money, just as individual consumers might, because they regularly spend more than they collect on corporate and personal taxes.
US Treasury Chief Janet Yellen warned Sunday that it was “absolutely imperative” for Congress to increase the country’s borrowing power, even as the threat of immediate default faded.
“It would be a disaster” if the United States did not raise the debt ceiling, Yellen told ABC’s “This Week”.
Yellen had said the United States would run out of money to pay its bills next Monday. McConnell and 10 other Republicans voted to pave the way for Democratic senators to increase the government’s borrowing power on a 50-48 vote.
Senate Majority Leader Chuck Schumer said Republicans should join Democrats in raising the debt ceiling as the country’s long-term debt has risen under Republican and Democratic control in the White House and of Congress.
The borrowing authority provides money to pay bills for debts already incurred, not future expenses. But Republicans have been reluctant to help Democrats raise the debt ceiling this time to protest Biden’s proposal to spend $ 2 trillion or more on the country’s biggest expansion of social safety net programs in five. decades.
Yellen has called for removing the debt ceiling, but that’s unlikely since Republican and Democratic lawmakers, believing it to be a winning political tactic, repeatedly blame themselves for who they claim to be unnecessary and unnecessary expenses on the part of their opponents.
“It should be a shared responsibility [to increase the debt ceiling], not just any party, ”Yellen said. “It is the responsibility of Congress.”
“We need to reassure the world that the United States is fiscally responsible,” she said, adding that if borrowing power was not increased by December 3, it would amount to “a self-inflicted crisis. “.
Yellen said that if the debt ceiling is not increased, 50 million older Americans may not receive government retirement benefits and that “our troops will not know when or if they will be paid. The 30 million families who receive a child tax credit, those payments would be at risk, ”she said.