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United States

22 Sept 2021

Democrats Pass Bill to Suspend Debt Limit to Avert Shutdown

The Index Today

The House passed a bill to suspend the debt limit of the country and temporarily fund the government to avoid another shutdown. The bill was approved with a 220-211 vote, with all democrats voting in favor and all republican apposed.
Republicans have vowed to block the bill once it reaches the senate as they favor a standalone funding bill but not a debt limit suspension. If the bill is unable to seek approval, the democrat house must look for an alternative funding plan to avoid the threat of a government shutdown and risk of default.
Nancy Pelosi and Senate Majority Leader Chuck Schumer are scheduled to meet on Monday to discuss the bill which combines debt measures and spending altogether with a $28.4 trillion debt ceiling.
Chuck Schumer has warned republicans that disapproving the proposed debt ceiling could negatively impact the economy and wreak havoc on benefits such as social security. He further said, “This is playing with fire. Playing games with the debt ceiling is playing with fire and putting it on the back of the American people.”
The congress must decide before the September 30th deadline which could either mean a partial government shutdown or exhaustion of borrowing channels. The increase in the debt limit could help the government avoid a financial meltdown. Currently, the debt ceiling of $28.78 trillion has been breached and is temporarily being funded by the Treasury Department.
Schumer discussed how a debt breach could affect the economy as it would see interest rates hiking along with increased taxes for consumers. Republicans have repeatedly said they will not support a debt ceiling or a borrowing limit.

©Photo: Jabin Botsford/The Washington Post

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