Republicans blocked US debt ceiling suspension bill

The Republican Party on Monday blocked a legislative package in the Senate to suspend the US debt ceiling and extend government funding until December.

The Republicans’ decision, which aims to make it difficult to approve President Joe Biden’s economic agenda, also has the immediate consequence that Democrats must meet two urgent tax deadlines.

The first will be the midnight from Thursday to Friday, when the government is doomed to partial administrative closure due to lack of funds.

The second to mid October, when The United States could enter into suspension of payments of its national debt.

Democrats last week approved in the lower house the legislative package overturned today by Republicans in the Senate that linked the two financial emergencies. The text extends government funding until December 3 and suspends the debt ceiling until December 2022, in addition to including $ 28 billion for natural disasters and $ 6 billion for Afghan evacuees.

However, Republicans, who voted as a block against the measureThey argued that they did not agree to approve funds for government and debt under the same umbrella.

Although the Senate is split 50-50, 60 votes are needed to pass these kinds of measures, so Democrats need some Republican collaboration.

The leader of the Republicans in the Senate, Mitch mcconnell, he said that His party pledges to approve funds for the government to avoid a partial administrative shutdown as of Friday, but not to suspend the debt ceiling. “We will support a clean text to avoid a government shutdown. We will not give Republicans a voice to raise the debt ceiling, ”he said.

To do so, he urged Democrats to use a legislative mechanism called reconciliation that allows exceptional bills to be approved with just 50 votes.

Democrats, however, have been debating among themselves for weeks how to use this mechanism to push through Biden’s economic agenda, so adding the debt issue to it will likely lead to more discussions and delays.

Treasury Secretary Janet Yellen has warned that if a new debt limit is not approved, the United States could go into suspension of national debt payments in October, a situation with dire consequences: interest rates on US debt would skyrocket, the stock market would fall, and tens of millions of soldiers and retirees would have no income. In addition, another recession could occur with millions of jobs lost.

This debt ceiling situation, which drags the United States into the abyss every few years, occurs because the government spends far more money than it receives through federal taxes. In 2021 alone, it is estimated that the government will spend $ 5.8 trillion and have $ 3.5 trillion in revenue, leaving a deficit of $ 2.3 trillion, according to the Congressional Budget Office.

The government can only issue debt up to the limit set by Congress, which has the power to raise that limit as it sees fit.

Lawmakers negotiated an increase in the debt limit for decades. But the drive to push the world’s largest economy to the brink dates back to 2011, when Republicans decided to cut Democratic spending and used the cap to do so.

“Most (Republican) leaders consider the 2011 Debt Ceiling Showdown to be ultimately a success, as they were able to force (then-President Barack Obama) to sign what was the biggest bill to cut spending. decades without failing, ”said Brian Riedl, then chief economist to Republican Senator Rob Portman.

The deal they struck was to cut government spending over the years.

But it was not fulfilled: the national debt and the budget deficit of the United States exploded in the following years due to the spending of the Republican and Democratic presidents.

(With information from EFE and AFP)

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