Status: 07.10.2021 9:48 p.m.
In the dispute over raising the debt ceiling, the Republicans and Democrats in the US Senate have come to an agreement for the time being. A solution was agreed by the beginning of December.
After days of struggle, the US Congress has found a temporary solution to the conflict over the suspension of the debt ceiling. Accordingly, the Democrats approved a proposal by the Republicans that the debt ceiling would be raised for two months.
A solution was agreed by the beginning of December, said the majority leader of the Democrats in the US Senate, Chuck Schumer. He hopes to be able to vote on it later in the day. The House of Representatives would then also have to approve the regulation.
Biden: “A meteorite” heading towards the economy
The impending default by the US government with potentially catastrophic economic consequences should thus be averted, at least temporarily. Earlier, Senate Republican minority leader Mitch McConnell had offered not to block an emergency debt ceiling increase to a certain amount until December. The purpose of the increase is to repay money that has already been borrowed.
However, there is still a dispute about what a solution beyond December could look like. Treasury Secretary Janet Yellen had warned of a possible financial crisis and recession should the US government fail to service its debts for the first time.
US President Joe Biden accused the Republicans on Wednesday of playing “Russian roulette” with the US economy and warned of the consequences: “It is a meteorite that is heading to hit our economy.”
Problem just postponed
In addition to the debt ceiling, Congress must also agree on a new budget by the beginning of December if it wants to avoid the paralysis of the federal institutions, the so-called “shutdown”.
While the debt limit has been suspended or raised dozens of times under presidents of both parties over the past few decades, Republicans are now standing opposite. With its blocking minority in the Senate, the party is blocking a suspension of the debt ceiling via the normal legal channels.