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Debt limit: USA avert insolvency

2021-10-13T00:57:09.958Z

The United States will remain solvent for now. The House of Representatives also approved an increase in the debt limit. At the turn of the year, however, new money worries threaten.



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US Capitol (symbol image)

Photo: J. Scott Applewhite / AP

It was more of a formality - but the members of the US House of Representatives have now also approved an increase in the debt ceiling.

This avoids the insolvency of the world's largest economy in the short term.

The 219 US Democratic MPs, who have a majority in the House of Representatives, voted for the proposal on Tuesday (local time).

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 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.

In addition to the upper debt limit, 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«.

$ 28.5 trillion is not enough

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 turned their backs on them.

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 the next year's congressional election.

The current debt ceiling is around $ 28.5 trillion.

Biden's Democrats actually wanted to lift the border by December 16, 2022.

In order to bring this project to the vote in the Senate in the regular way, they also need votes from Republicans.

The dispute is about more than just debt

Their parliamentary group leader Mitch McConnell refused to approve.

He also repeatedly points out that the Democrats could contest the entire process with their simple majority in the Senate through a special procedure for budget issues.

The Democrats are opposed to this.

They fear that the procedure is too risky and could lead to a number of delays.

There is another showdown of strength behind the dispute over the bankruptcy.

Biden tries to save the two central projects of his presidency: a large package for investments in the country's infrastructure and a second huge package for social investments.

The Republicans definitely don't want to be involved in the second project.

jok / AFP

Source: spiegel

All news articles on 2021-10-13

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