US Lower House approves suspending debt ceiling until December

The Lower House of USA, with a Democratic majority, approved this Tuesday to suspend the debt ceiling until December to prevent the country from incurring a suspension of payments on its national debt as of October 18.

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.

Disagreements between Democrats and Republicans had put the United States on the verge of defaulting on its national debt, but the bill approved on Tuesday serves to strengthen the country’s solvency and maintain the stability of financial markets.

Specifically, the initiative, which was already approved by the Senate last week, raises the debt ceiling of US $ 480,000 million, an amount that will allow the United States to pay its outstanding debts until December 3.

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

In fact, progressives proposed suspending the debt ceiling until December 2022 so as not to speak about the issue during the campaign for the legislative elections in November of that year, in which the party fears losing the narrow majority it has in both chambers. Congress Republicans, for their part, have opposed passing any long-term measure.

Even so, the leader of the Republicans in the Senate, Mitch McConnell, decided last week to renounce a parliamentary mechanism that requires a super majority to pass laws, which allowed the Democrats to carry out a temporary suspension of the ceiling of debt.

Treasury Secretary Janet Yellen warned on several occasions that the United States would run out of funds to pay its debts on October 18, with potentially “catastrophic” consequences.

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

The current situation regarding the debt ceiling occurs because, unlike other countries, in the United States the government can only issue debt up to the limit established by Congress, which has the power to raise that ceiling as it sees fit.