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Debt ceiling deadlock continues, time is ticking for Democrats

D-12 before a potential disaster. Democratic Senators Leader Chuck Schumer warned on Tuesday that the very threat of a US default could push financial agencies to lower the country’s rating “very soon” if no early agreement is reached to raise the debt. debt ceiling.

Republicans and Democrats are engaged in a standoff over a vote to raise the maximum level of indebtedness of the world’s largest power, a procedure usually easy but which this time has become bogged down in Congress under the weight of political divisions. Time is running out: the United States will run out of money on October 18 if nothing is done by then, according to the US Treasury.

“As of now, the rating agencies say that it is possible that they lower (the note of the United States, note) well before the 18th”, thundered Chuck Schumer in front of the journalists. This would “cost American consumers, American businesses and the American economy a great deal,” he warned, saying the cuts could come “very soon”.

“Irresponsible”, according to Biden

The debt ceiling is the maximum amount of debt of the United States. It was suspended in 2019 as part of an agreement between the Trump administration and the then-Democratic opposition, and has been in effect again since August 1, at just over $ 28 trillion. If it is not relieved or suspended, the US government will have to stop living on credit overnight and cut spending.

Joe Biden had stepped up to the plate on Monday, lamenting that because of “irresponsible” Republican opposition, he could “not guarantee” that the United States would not default on its debt for the first time in its history.

Wednesday’s vote included

Republicans have a blocking minority in the Senate, which allowed them to bar Democrats from settling the debt issue twice last week. Chuck Schumer has scheduled a new procedural vote Wednesday on a text that would suspend the debt limit until December 2022. But it is for the moment doomed to failure.

It would be necessary for 10 Republicans to unite with the 50 Democrats for the text to overcome this obstacle and then be able to be approved definitively with only Democratic votes. However, the opposition refuses to vote as a whole, believing that this would amount to leaving the field open to the colossal investment plans wanted by Joe Biden. They urge Democrats to use a complex, lengthy process instead. Under Donald Trump, who added $ 7.8 trillion to the US debt, Republicans voted three times to raise the ceiling without batting an eyelid.

“My message to Republicans: if you don’t want to help save our country, then get out of the way,” Joe Biden tweeted Tuesday. “It would be catastrophic (…) for us to be in a position where we lack the resources to pay government bills,” US Treasury Secretary Janet Yellen had earlier launched on CNBC. “I really expect this to cause a recession,” she continued.

The United States has never defaulted, but in 2011, under the Obama administration, the political deadlock led the Standard and Poor’s rating agency to withdraw the “AAA” rating from American debt, causing a wave of unrest. shock in international markets.

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