Congressional Democrats raise debt limit by $2.5 trillion, averting calamity

Congressional Democrats raise debt limit by $2.5 trillion, averting calamity

To avert a catastrophic default, lawmakers raised the national debt ceiling by $2.5 trillion and extended it into 2023. The House voted Tuesday night to raise the debt ceiling by $2.5 trillion to avoid the first-ever default.

In a 50-49 vote Tuesday, the Senate passed legislation to increase the limit along party lines. In the early hours of Wednesday, the House approved the bill 221-209. It only needs the signature of President Joe Biden now. GOP lawmakers who voted with Democrats were Rep. Adam Kinzinger.

Janet Yellen has warned that Congress has little time to resolve the debt limit issue before December 15. There has been a clear consensus that preventing the first-ever default is essential. And leaders from both parties have stressed how it must be stopped.

Now, President Joe Biden must sign the bill into law.

The bill will have prevented a U.S. default that could have disrupted the global economy. It will also halt Social Security and veterans’ payments and hike the president’s a mortgage and loan interest rates.

Spending Cap Dispute

Republican and Democratic leaders clashed over spending caps in October. Even though both parties agreed that raising the debt limit was necessary, Republicans assert that the Democrats should raise the limit independently. Because they need to offset the costs of Biden’s $1.75 trillion social spending package.

The Democrats, who raised the debt limit multiple times under the Trump administration, insisted it is a cooperative effort to cover past spending.

As a result of the October disagreement, the GOP gave Democrats the votes needed for a short-term raise to the debt limit but promised less cooperation next winter.

Last week, however, party leaders announced a two-step approach to raising the debt limit. In the end, they needed 10 Republican votes for a one-time rule change that altered the number of votes required for the debt-limit hike and made it easier for Democrats to pass the legislation without any Republican votes.

Therefore, Democrats require documents to cite a specific amount by which they want the debt limit raises to reach an agreement. Chuck Schumer, Majority Leader in the Senate, said the government will avoid default by the end of 2023 with a budget of $2.5 trillion.

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