The House of Representatives enacted legislation on Tuesday that extends the country’s debt ceiling for several weeks, allowing the government to keep paying its debts until early December and averting the economic devastation that would result if the US defaulted.By extending the country’s borrowing limit for a few weeks, lawmakers have set the stage for a new debt ceiling battle in early December, when they’ll have to come up with a long-term solution.
President Joe Biden will sign the bill, which raises the debt ceiling by $480 billion. If Congress does not lift the debt ceiling, Biden has warned of “a self-inflicted wound that would send our economy over the cliff.” He had pleaded with lawmakers to raise the debt ceiling before Oct. 18, when the Treasury Department predicted it would run out of “extraordinary” financial options to avoid default.
According to Treasury Department officials and analysts, if the United States defaulted on its debt for the first time, the consequences may result in a global recession. 401(k)s and other investments would suffer if the stock market fell. In 2013, for example, a debt ceiling impasse cost the economy 1% of GDP.
The national debt has already surpassed the $29 trillion mark. The debt ceiling was raised to address rising debt from earlier spending initiatives and tax cuts enacted by Republican and Democratic-controlled Congresses.The vote on Tuesday was 219-206, with every Republican voting against the extension. Republicans have declared they won’t let Democrats, who hold a razor-thin majority in Congress, raise the debt ceiling because they feel left out of Biden’s big-ticket spending promises.
“Asking us to raise a trillion-dollar credit card limit with no influence over how it’s spent?” Before the vote, Rep. Dan Meuser, R-Pa., remarked on the House floor. “That is irresponsible, and I will not participate.”House Majority Leader Steny Hoyer, D-Md., reminded Republicans that Tuesday’s vote to increase the debt ceiling was required to cover expenses incurred by politicians from both parties that must now be reimbursed.
“This is the debt we owe. It is the debt of the United States of America “On the floor, he remarked. “America, on the other hand, pays its bills.”After weeks of negotiations, the law was enacted by the Senate last Thursday. On Thursday, eleven Republican senators, including Minority Leader Mitch McConnell of Kentucky, assisted Democrats in breaking a filibuster, allowing the bill to reach the floor, where it was passed by a simple majority with no Republican votes.