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Default avoided: US Congress approves higher debt ceiling

As of: 12/15/2021 9:09 am

The United States is allowed to incur more debt: after the US Senate, the House of Representatives has now voted in favor. These rooms avoid the bankruptcy of the United States. Before that, there was a long struggle.

The US Congress has approved an increase in the debt ceiling, thus preventing immediate US debt. In the future, it could borrow up to $ 2.5 trillion. A few hours ago, a narrow majority of Democrats in the Senate, the other chamber of Congress, voted in favor. The resolution in the House of Representatives came in at 201 to 221 and the United States threatened default just hours before Treasury Secretary Janet Yellen’s point.

Bankruptcy has never occurred

After Dec. 15, Finance Minister Yellen warned that his ministry would run out of funds to fund the government. The controversy over the maximum limit is usually carried out until the last minute in Congress: so far there has never been a default. The maximum limit has already been raised more than 80 times, mostly jointly by both parties.

The resolution is currently being submitted to President Joe Biden for signature. The debt ceiling should be raised to fund Python’s trillion-dollar infrastructure, health, environment and community projects. According to the Budget Office of Congress, the government’s debt ceiling was $ 28.9 trillion. Thus the new debt would result in an upper limit of $ 31.4 trillion – significantly more than the one-year US economic output.

Political turmoil for months

According to reports, the new debt tax should be sufficient to finance government business until 2023. This means that this politically important issue does not need to be re-voted before the Congress election in November next year. In October, the US Congress approved a $ 480 billion increase in the debt ceiling to allow more time for a long-term solution. Republicans have refused to support US President Joe Biden’s Democrats. In the end, they agreed to a simpler procedure, which would allow Democrats to increase the Senate with a slim majority. The U.S. government recently had to finance its current business with some “extraordinary measures.”

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Most countries do not have a debt ceiling controlled by parliament. In most cases, the amount of debt is derived from parliamentary resolutions – for example, expenditure incurred by the budget and other laws. In the United States, too, there have been calls recently for the border to be canceled or suspended. However, the proposals have not yet found a majority in Congress.