WHAT YOU NEED TO KNOW:
- The House of Representatives passed a bill to increase the U.S. government’s borrowing limit to $28.9 trillion.
- The bill was sent to President Joe Biden’s desk for his signature and enactment.
- The legislation will allow the Treasury Department to pay the country’s bills until early December.
The House of Representatives approved a bill on Tuesday to temporarily increase the US government’s debt limit to $28.9 trillion.
The bill was approved by the Senate on Thursday to help the government avoid a default on its debt at least until early December.
The Democrats fought hard to maintain party discipline to pass the $480B borrowing limit increase. As expected, the vote was along party lines, 219-206 — with the Democrats all voting “yes” and every no from Republicans.
The legislation is the result of an agreement between Senate Minority Leader Mitch McConnell and House Democrats.
Currently, the national debt is $28.4 trillion and would be allowed to increase to about $28.8 trillion.
The bill travels to President Joe Biden’s desk for his signature. The measure is expected to be enacted into law before October 18 — that’s the estimated date the treasury department said it would no longer be able to pay the US debts without action from Congress.
The GOP legislators said the Dems should take responsibility for increasing the debt limit for wanting to spend trillions of dollars to expand social programs and address climate change. Democrats argued that the raised borrowing limit is needed to cover the cost of tax cuts and spending programs during former President Donald Trump’s administration.
House passage warded off concerns that 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.
On Friday, McConnell wrote to Biden saying he would not work with Democrats on another debt limit increase. The Senate Republican leader was slammed by Trump after the Senate vote.
Legislators also have only until 3 December to pass spending legislation to avoid a government shutdown.
House Speaker Nancy Pelosi on Tuesday said she was optimistic that Democrats could agree on changes to reduce the cost of their social policy plans “in a timely fashion”.
On Tuesday’s briefing, White House press secretary Jen Psaki, told reporters: “We are at a point where there are choices that need to be made, given that there are fewer dollars that will be spent.”
The president has suggested a range of more like $2T rather than the initial $3.5T goal.
Psaki said that the conversations are ongoing about how to trim the bill.
Though Psaki wouldn’t confirm if Biden supported Pelosi’s strategy for the “Build Back Better” bill, she noted that it would be smaller versus the $3.5T the president initially proposed.
Source: The Guardian