The Congress Chamber voted 50 to 49 for an increase in the debt limit by 2.5 trillion dollars (around 2.2 trillion euros). President Joe Biden’s Democrats voted unanimously in favor of the measure, while opposition Republicans, who were missing a Senator, unanimously against. The House of Representatives has yet to approve the agreement, this was planned for the next few hours. The Democrats have a majority in the Chamber.
Treasury Secretary Janet Yellen had previously warned that if the debt ceiling is not raised, the US faces bankruptcy around Wednesday. This would have had a devastating impact on the US economy and financial markets. A default in the world’s largest economy could trigger a global financial crisis and economic downturn.
The government’s debt ceiling was last at $ 28.9 trillion, according to the Congressional Budget Office. With the new debt, there is an upper limit of $ 31.4 trillion – significantly more than the US economic output for a year.
National debt in the US is rising and rising – view of the Treasury in Washington
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In October, the US Congress approved new debt of $ 480 billion to allow more time for a longer-term solution.
“The Americans can take a deep breath and be sure that there will be no default,” affirmed the majority leader of the Democrats in the Senate, Chuck Schumer, after the vote in front of journalists. “No playing with fire, no delays in paying off debts, no risk of a new recession – good governance has won on this very important issue.”
Republicans speak of irresponsible fiscal policy
The Republicans accuse Biden, who after a trillion dollar infrastructure package also wants a trillion dollar social and climate protection package, to have an irresponsible budget policy. The Democrats argue against it that the increase in the debt ceiling is necessary in particular because of the budgetary policy of Biden’s predecessor Donald Trump. You accuse the opposition party of wanting to exploit the issue politically with a view to the mid-term congressional elections next year.
se / rb (afp, ap, dpa)
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