After Democrats approved a proposal by Republicans

US Congress reaches agreement to avoid debt repayment crisis

Senate Republican Leader Mitch McConnell stressed that he wants to spare Americans a crisis in the short term.

Reuters

The Democratic leader of the US Senate, Chuck Schumer, announced yesterday that an agreement was reached in Congress to avoid the United States defaulting on its debt payments, after the Democrats approved the Republican proposal to raise the debt ceiling to two months.

"I have good news," Schumer said from the Senate floor. "We have reached an agreement to raise the debt ceiling through early December, and we are hopeful that we can accomplish that as soon as possible."

The Republican leader in the Senate, Mitch McConnell, said the day before yesterday that he wanted to "save Americans a short-term crisis caused by the Democrats," stressing that he would allow his opponents to agree as soon as possible to suspend the debt ceiling until December.

Solve

McConnell urged Democrats, whose legislative margins are hampered by their very small majority, to take advantage of that proposal to find a solution on their own in the longer term.

But he made it clear that "this solution goes through a more complex legislative path that the administration of US President Joe Biden rejects his behavior on the debt front."

Raising the debt ceiling mainly serves to repay borrowed amounts, including thousands of billions of dollars spent under former US President Donald Trump.

On Wednesday, the White House responded coolly to the Republican proposal, and its spokeswoman, Jen Psaki, called on them to "not put off problems," while a long-term agreement can be reached from now.

an appointment

And the US Treasury had set October 18 as the date for the possibility of the United States, the largest global economy, starting to default on its debts if Congress did not reach a “debt ceiling,” that is, increasing the country’s ability to borrow.

The public debt ceiling is the legal maximum for public debt in the United States, and is set at $28.4 trillion.

date

It is noteworthy that the date of October 18 is not fixed, but the US Treasury Secretary, Janet Yellen, considered that "the liquidity in the country will be very little" after this date in the absence of a legislative solution.

Then the government will have to cut a large amount in its expenditures, and perhaps also in the wages of official employees, or in the social allocations for some segments of society.

The United States, like almost all major economies, has been dependent on debt for decades in terms of public expenditures, and it has raised the debt ceiling several times.

However, since the presidency of Barack Obama, the Republicans have used this routine legislative maneuver as a tool for political pressure.

increasing pressure

The pressure has clearly increased in recent days on the Republicans, especially from President Joe Biden, who has weakened his position following the withdrawal from Afghanistan, and is facing difficulty in passing major economic and social reforms.

And Biden called, the day before yesterday, to the White House, in person, via the Internet, prominent figures in the circles of the "Wall Street" exchange, to warn of the repercussions of non-payment, which would set a precedent in the history of the United States.

Biden once again attacked the Republicans, asking them to "stop the game of Russian roulette", which harms the American economy and the United States' financial reputation.

Raising the debt ceiling mainly serves to repay borrowed amounts, including thousands of billions of dollars spent during the Trump era.

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