Monday, January 24

The US avoids defaulting on the debt, but again peeking into the abyss in December


Republicans have already warned that they will no longer support a suspension of the debt ceiling

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The Speaker of the House of Representatives, Democrat Nancy Pelosi.JAMES LAWLER DUGGANREUTERS

With the final approval of an initiative in Congress, the United States this Tuesday avoided incurring a default on the national debt as of October 18, when he was going to run out of funds, but I will have to discuss this issue again before December.

The issue of indebtedness had in recent weeks become a thriller in Washington, where disagreements between Democrats and Republicans had turned the country on the brink of default for the first time in its history.

This Tuesday, however, the House of Representatives, with a Democratic majority, managed to pass a bill that raises the debt ceiling of 480,000 million dollars, an amount that will allow the country to pay its outstanding debts until December 3.

The initiative was approved with 219 votes in favor and 206 against, and now it will be sent to the White House so that the US president, Joe Biden, sign it and it becomes law.


Before the proposal received the green light, the Speaker of the House of Representatives, the Democrat Nancy Pelosi, had derisively accused the leader of the Republicans in the Senate, Mitch McConnell, from having been playing “Russian roulette” with the American economy for weeks.

“What have you got against our own economy?” Pelosi reproached the Republicans.

“This catastrophe against our workers could have an impact of more than a hundred years. Is that not important to them? And the world economy? -aadi-. Global credit markets frozen, stock markets in each and companies around the world laying off their employees. “

Pelosi painted a grim picture of what might have happened had Congress not acted.

The United States has never had to declare suspension of payments on its national debt, but was very close in 2011, when the mere possibility of that happening triggered chaos in the financial markets and caused the Standard & Poor’s credit rating agency to downgrade the country’s solvency note.

The possibility of the US plunging into a recession took its toll on McConnell, who last week gave his arm twisted.

Specifically, McConnell decided to renounce a parliamentary mechanism that requires a supermayora to pass laws, which allowed the Democrats to pass the measure alone in the Senate.


It is, in any case, a patch that does not fully meet the demands of the Democrats and Biden himself, who they wanted a long-term solution.

In fact, progressives had proposed suspending the debt ceiling until December 2022 so as not to have to speak on that issue during the campaign for the legislative elections in November next year, in which the party fears losing the narrow majority it has in the two houses of Congress.

Republicans, for their part, have already warned that they will no longer support a suspension of the debt ceiling.

Therefore, the question now is to see what the Democrats will do to avoid defaulting on the debt from next December 3, when the United States will run out of money to pay its bills.

Furthermore, on December 3, the funds approved by Congress in September to avoid a government shutdown will run out.

Therefore, the end of the year could be especially hectic in Congress, where Democrats are also trying to pass two key measures on Biden’s agenda: an infrastructure plan valued at $ 1.2 trillion and a $ 3.5 trillion social spending package, although that amount will likely be reduced in the end.

With their sights set on December, Republicans want link raising the debt ceiling to Biden’s social spending plan and they have asked Democrats to pass those two measures alone using a legislative mechanism called “reconciliation.”

Democrats have already voiced their rejection of that idea because they don’t want to give the Conservatives more ammunition to portray them as the party that increases America’s debt, an idea that the Conservatives have echoed in multiple election campaigns.

From time to time, the United States appears to default on the national debt because, unlike other countries, the United States Government can only issue debt up to the limit established by Congress, which has the power to raise that ceiling as it sees fit.

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