The United States Senate has approved this Thursday an agreement to increase the debt limit until December, thus preventing the Government from incurring in possible defaults.
In this way, the US upper house has given its approval – with 50 votes in favor and 48 against – to this measure that, now, must also be approved in the House of Representatives, something that, predictably, will happen the next week, pick up the CBS News network.
Thus, this project raises the ‘debt ceiling’ by 480,000 million dollars – more than 415,000 million euros – and will allow the Administration of the president, Joe Biden, to face its bills until next December 3.
Previously, the Senate Majority Leader, Democrat Chuck Schumer, had already announced an agreement with the Republican Party. “I have good news … We have reached an agreement to extend the debt limit until the beginning of December and we hope to sign it today,” he explained.
Until now, Republicans had been blocking Democratic efforts to suspend the ‘debt ceiling’ with a simple majority of votes in the Senate, which implied that 60 votes had been required to carry out this measure, a number of senators that the Democratic Party would not have reached.
Therefore, the agreement has been achieved thanks to the fact that the Republican leader in the Senate, Mitch McConnell has proposed an interim solution to avoid defaults by the Government.
Republicans and Democrats had maintained for weeks their dispute over how to raise the ceiling on the government’s debt, which expected to exhaust its emergency resources on October 18, with the risk of defaulting on its obligations beyond that date.
The Secretary of the Treasury of the United States, Janet Yellen, went so far as to warn that not raising the country’s debt ceiling would drag the economy into recession.
“It would cause a recession,” Yellen said in an interview with CNBC where she noted that “it would be catastrophic not to pay the government’s bills,” which would undermine the credibility of the United States.
“Securities issued by the US Treasury are seen as the safest asset in the world and that supports the dollar as the world’s reserve currency and putting that in question by not paying any of our bills would be catastrophic,” she said.