US Senate approved law to extend debt limit until December and avoid default

The Senate dodged Thursday night a debt disaster in the United States, voting for extend government borrowing authority until December and temporarily avoid a fault unprecedented that experts warned it would devastate the economy and hurt millions of Americans.

The 50-48 vote in favor of the bill to increase the public debt ceiling has instant relief in Washington and beyond. However, it only provides respite. Assuming the House of Representatives votes the same (Democrats have a majority there, so that shouldn’t be a problem), Republican and Democratic lawmakers will need to reconsider their deep differences on the issue before the end of the year.

This debate will take place as lawmakers also scramble to fund the federal government for the new fiscal year and wage their bitter battle over President Joe Biden’s top national priorities: a bipartisan infrastructure plan with nearly $ 550 billion in new spending, as well as a much larger $ 3.5 trillion effort focused on health, safety net programs and the environment.

To alleviate the looming crisis, the Republican Leader of the Senate, Mitch mcconnell, from Kentucky, offered his support to a short term extension government borrowing authority, after leading strong Republican opposition to a longer extension. He acted as Biden, and business leaders have raised concerns that a default would disrupt government payments to millions of Americans and plunge the country into a recession.

The GOP concession was not very popular with some members of McConnell’s caucus, who complained that the nation’s debt levels are unsustainable.

Congress has only a few days to act before the deadline for the October 18, after which the Treasury Department warned that you will quickly run out of funds to deal with the burden of the nation’s already accumulated debt.

It is likely that the House of Representatives approves the bill next week.

Republican leaders worked throughout the day to find the 10 votes they needed from their party to advance the extension of the debt ceiling to a final vote, hold a private meeting in the late afternoon. It was a long and “heated” discussion in the room, said Senator Josh Hawley of Missouri.

McConnell allowed all opinions to be aired and ultimately told senators he would vote for it. Wall Street rose slightly on Thursday when the deal came out.

The deal paves the way for some sort of following in December, when Congress again faces tight deadlines to fund the government and raise the debt ceiling before heading home for vacation.

The $ 480 billion increase in the debt ceiling is the level the Treasury Department declared necessary to safely reach on December 3.

“I thank my fellow Democrats for showing unity in resolving this Republican-fabricated crisis,” said Senate Majority Leader Chuck Schumer of New York. “Despite overwhelming opposition from Leader McConnell and members of his conference, our caucus held firm and we pulled our country out of the edge the Republicans tried to push us into.”

(With AP information)

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