The Final Sprint to Raise the US Debt Ceiling: Senate Considers Two-Year Extension

The US Senate is engaged Thursday in a race against time to validate in turn a raising of the debt ceiling, and thus avert the threat of default by the world’s leading economic power. “The Senate will remain in session until we manage to adopt a text”, raising the maximum amount of indebtedness of the country, promised the democratic leader Chuck Schumer. He did not rule out the possibility of a vote this weekend.

The bill examined in the Senate has already been validated on Wednesday evening by a large majority of elected members of the House of Representatives. The result of fierce negotiations and snatched from the forceps, this agreement must make it possible to avoid the worst: that the coffers of the country find themselves dry on June 5, risking pushing the United States into default.

disaster scenario

This unprecedented situation would plunge into the unknown the American finance and economy but also, by extension, international. It is to avoid this scenario with potentially catastrophic repercussions that Democratic President Joe Biden and Republican House of Representatives boss Kevin McCarthy reached this compromise.

The bill makes it possible to raise for two years, i.e. until after the presidential and legislative elections of 2024, the maximum amount of indebtedness of the United States, currently at 31,400 billion dollars (some 28,120 billion francs ). In exchange, Democrats agreed to limit some spending, but not as much as Republicans wanted.

‘Not the luxury of waiting’

“The agreement adopted last night by the House is an encouraging step towards fiscal consolidation, but make no mistake, there is still a lot to do,” assured the Republican tenor in the Senate, Mitch McConnell. If he invited his peers to validate the agreement, several conservative senators have already announced that they would oppose the text.

A big point of contention for the left, the compromise includes modifications to the conditions imposed to benefit from certain social aid. “I cannot, in my soul and conscience, vote in favor of a bill that harms workers,” said the influential senator Bernie Sanders.

The staff of the Congress is however confident for the moment on an adoption of the 99-page text. It is in fact very common for last-minute compromises to be reached on this type of file. But “the Senate does not have the luxury of waiting,” insisted Chuck Schumer.

(AFP)Show comments