US House votes in favour to raise debt ceiling, avert default

THE Democratic-controlled US House of Representatives gave final approval on Tuesday to a Senate-passed bill temporarily raising the Government’s borrowing limit to US$28.9 tril, putting off the risk of default at least until early December.

Democrats, who narrowly control the House, maintained party discipline to pass the hard-fought, US$480 bil debt limit increase here by 219-206. The vote was along party lines, with every yes from Democrats and every no from Republicans.

President Joe Biden is expected to sign the measure into law this week (before Oct 18) when the Treasury Department has estimated it would no longer be able to pay the nation’s debts without congressional action.

Republicans insist Democrats should take responsibility for raising the debt limit because they want to spend trillions of dollars to expand social programmes and tackle climate change.

Democrats say the increased borrowing authority is needed largely to cover the cost of tax cuts and spending programs during former Republican President Donald Trump’s administration which House Republicans supported.

House passage warded off concerns that the US – the world’s largest economy – would go into default for the first time, but only for about seven weeks, setting the stage for continued fighting between the parties.

Senate Republican Leader Mitch McConnell wrote to Biden on Friday that he would not work with Democrats on another debt limit increase. McConnell was harshly criticised by Trump, the Republican party’s leader, after the Senate vote.

Lawmakers also have only until Dec 3 to pass spending legislation to prevent a government shutdown.

House Speaker Nancy Pelosi told reporters she hoped there could be a future bipartisan solution to the debt ceiling issue, despite McConnell’s warning.

Pelosi told her weekly news conference that a Democratic proposal to allow the Treasury Department to lift the debt ceiling, with Congress having the ability to overrule it, “has merit.”

She also repeated that Democrats do not want to use a procedural manoeuvre called “reconciliation” to raise the ceiling. Reconciliation would let Democrats raise the ceiling with 51 votes rather than the 60 required under the Senate’s filibuster rule if Republicans continue to refuse to cooperate. – Oct 13, 2021

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