Senate approves expedited process to avert US debt crisis
U.S. senators voted on Thursday to create a single law allowing Democrats to lift the nation’s borrowing power and avoid a disastrous credit default without requiring a vote from opposition Republicans.
The Senate voted 59 to 35 for the measure, with 10 Republicans, including Minority Leader Mitch McConnell, supporting the bill.
The move allows the Democratic-controlled Congress to raise the debt ceiling by a specific amount with a simple majority in both chambers, meaning it can pass without Republican fingerprints on the hike.
“We still have a few steps to go before we fully resolve this issue, but I am optimistic that after today’s vote we will be on track to avoid a catastrophic default,” the Majority Leader said. Democrat in the Senate, Chuck Schumer.
US President Joe Biden is expected to quickly sign the unusual procedural measure that paves the way for the passage of the second bill, which would effectively increase the government’s borrowing power, in the coming days.
A debt ceiling increase would normally require 60 votes in the Senate split 50-50, meaning Republicans, who are still keen to project themselves as fiscal conservatives, would have to participate with votes in favor.
But the new law means the body can now pass only with the support of every Democrat and a decisive “yes” from Vice President Kamala Harris.
Meanwhile, Republicans can essentially sit on the sidelines, not blocking Democrats but offering no votes themselves to raise the limit.
The compromise caps weeks of arduous negotiations and comes days before the deadline for reaching the debt ceiling.
Without action, the United States would no longer be able to meet its debt repayment obligations shortly after next Wednesday.
America spends more money than it brings in through taxation, so it borrows money by issuing government bonds, considered one of the safest investments in the world.
About 80 years ago, lawmakers introduced a limit on the amount of federal debt that could be accumulated.
The cap has been raised dozens of times to allow the government to meet its spending commitments – usually without drama and with support from both sides – and stands at around $29 trillion.
Final simple majority votes in the House and Senate on raising the debt ceiling are expected early next week.
Democratic leaders have spent weeks pointing out the devastation a default would have caused, including the loss of an estimated 6 million jobs and $15 trillion in household wealth.
The battle was a deadly affair for Mitch McConnell, who leads Republicans in the Senate and has come under heavy fire from his side and former President Donald Trump for helping Democrats avoid crisis.
The Kentucky senator shocked Washington this summer when he demanded that Democrats use a complicated and time-consuming legislative process called “reconciliation” to raise the borrowing limit themselves.
His plan was to force Democrats to increase debt by a certain number without any Republican involvement, then hammer them for out-of-control spending on the campaign trail.
Instead of gumming up the process, McConnell finally accepted the equally complicated but much faster approach that is playing out now.
Schumer thanked McConnell, describing their discussions to reach an agreement as “fruitful, frank and productive”.
(With contributions from AFP, Reuters)