The US ran out of money on October 18th, and from that day the country was no longer able to pay its debts. Now the House of Representatives approves the raising of the debt ceiling at the last minute. The problem has only been postponed, not eliminated.
The members of the US House of Representatives have approved an increase in the debt ceiling and thus averted the insolvency of the world’s largest economy for the time being. The 219 US Democrats, who have a majority in the House of Representatives, unanimously voted for the proposal on Tuesday evening. This will increase the debt limit by $ 480 billion.
Experts assume that the measure will create time until mid-December or early January before the increased debt ceiling is also reached. Initially, the beginning of December was expected. The US Senate voted in favor of the increase last week.
The decision came just a few days before the October 18th cut-off date. Then, for the first time in its history, the US would no longer have been able to pay its debts. Treasury Secretary Janet Yellen had warned of a possible financial crisis and recession. In addition to the debt ceiling, Congress must also agree on a new budget by the beginning of December if it wants to avoid the paralysis of the federal institutions, the so-called “shutdown”.
While the debt limit has been suspended or raised dozens of times under presidents of both parties over the past few decades, the Republicans have now stood up to each other. With its blocking minority in the Senate, the party is blocking a long-term suspension of the debt ceiling via the normal legal channels. The Democrats accused the Republicans of blocking Biden’s political agenda and wanting to wreak havoc before next year’s congressional election.