The United States House of Representatives (US) on Tuesday (12/10) is ready to extend the term of the government’s debt lending authority until early December to prevent the US government from defaulting for the first time next week when the country runs out of money to pay its bills.
A vote in the U.S. House of Representatives agrees to raise the debt limit by $480 billion until December 3. The previous US debt limit amounted to $28.4 trillion. The decision follows approval steps taken by the US Senate last week. The House of Representatives will then send the bill to President Joe Biden for signature.
While a vote in Congress and Biden’s approval will resolve the government’s short-term financial crisis, the Democratic-controlled Congress and the White House have yet to agree on how to agree to an extension of long-term borrowing authority, which is expected throughout fiscal year 2022.
Senate Minority Leader Mitch McConnell got enough votes from fellow Republican senators last week to help Democrats pass an extension of the term of his short-term borrowing authority, but he has said he will not do so again as the December deadline approaches.
McConnell asked Democrats to approve their own debt ceiling increase through a legislative process known as reconciliation, in which they do not need Republican support.
However, Democrats say the process will be complicated and time-consuming, so it is uncertain whether they will be able to increase lending authority in December.
The United States, is one of the few countries in the world that has a debt ceiling. The ceiling has been changed about 70 times since 1965, either by increasing it to a certain number or by suspending the loan period for a year or two.
The US needs to borrow as much money as any given individual can, given the fact that its government spends more than it generates through corporate and individual taxes.
US Treasury Secretary Janet Yellen warned Sunday that it was “very important” for Congress to increase the tenure of the nation’s borrowing authority, even when there is no longer a threat of default.
“It would be disastrous” if the United States didn’t raise its debt ceiling, Yellen said on ABC’s “This Week.”
Yellen said the US 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 term of government borrowing authority by a 50-48 vote in the Republican vote.
Senate Majority Leader Chuck Schumer said Republicans should join Democrats in raising the debt ceiling as America’s long-term debt has risen under both Republican control and Democrats in the White House and Congress. (lt/ka)