WASHINGTON – President Joe Biden on Thursday enacted a bill raising the country’s debt limit until early December, delaying the prospect of an unprecedented federal default that would cause economic catastrophe.
The House passed the $ 480 billion increase in the country’s borrowing limit on Tuesday, after the Senate approved it in a party line vote last week. The final approval came after a prolonged standoff with Senate Republicans, who derailed the Democrats’ initial efforts with obstructions, delays that require 60 votes to be stopped.
Ultimately, a handful of Senate Republicans agreed to join the Democrats and voted to end the GOP delays and move to a final vote on the legislation, but Minority Leader Mitch McConnell said Republicans would offer no support for another increase in December.
Treasury Secretary Janet Yellen had warned that the United States would hit its borrowing limit on Monday, an unprecedented situation that she and others said could lead to economic catastrophe for a country still reeling from ‘a global pandemic. Routine government payments to Social Security recipients, disabled veterans, and active-duty military personnel would potentially be delayed, and economic fallout in the United States could spill over into global markets.
The passage of the increase in the debt ceiling to the short term ensures that, for now, the United States will continue to meet its obligations. But that creates another potential cliff at the end of the year – at a time when lawmakers will also push to pass a federal funding bill to avoid a government shutdown.
Republicans said Democrats should use a budget maneuver to pass an increase in the debt limit without Republicans’ backing, like the process Democrats use for Biden’s massive plan on climate change and the safety net social. But Democrats resisted this option. The clash between the two parties leaves Congress with no clear solution to avoid the next default deadline in December, but the White House has stressed it is still pursuing a bipartisan raise.
Lawmakers from both parties have used the debt ceiling votes as leverage for other priorities. House Speaker Nancy Pelosi threatened to vote against raising the debt ceiling when President Donald Trump was in power, saying she did not intend to support lifting the debt ceiling to allow Republicans to give another tax break to the rich. And Republicans in 2011 were successful in coercing President Barack Obama into accepting about $ 2 trillion in deficit reduction as a condition for raising the debt limit – although lawmakers subsequently reversed some of those cuts.