Senate Republican Minority Leader Mitch McConnell (Reuters)
The Republican Party blocked a legislative package in the Senate on Monday to suspend the US debt ceiling and to extend government funding until December.
The Republicans’ decision, which aims to make it difficult to pass President Joe Biden’s economic agenda, also has the immediate consequence that Democrats must meet two urgent fiscal deadlines.
The first will be at midnight from Thursday to Friday, when the Government will be forced into a partial administrative closure due to lack of funds.
The second in mid-October, when the United States could go into default on its national debt.
Democrats approved last week in the Lower House the legislative package knocked down today by Republicans in the Senate that linked the two financial emergencies. The text extended government funding until December 3 and suspended the debt ceiling until December 2022, in addition to including $ 28 billion for natural disasters and $ 6 billion for Afghan evacuees.
However, the Republicans, who voted en bloc against the measure, argued that they do not agree to approve the funds for the Government and the indebtedness under the same umbrella.
Although the Senate is divided 50-50, 60 votes are required to pass these types of measures, so the Democrats require some Republican collaboration.
The leader of the Republicans in the Senate, Mitch McConnell, said that his party agrees to approve funds for the Government to avoid a partial administrative closure as of Friday, but not in the suspension of the debt ceiling. “We will support a clean text to avoid a government shutdown. We will not give Republican votes to raise the debt ceiling, “he said.
To do this, he urged Democrats to use a legislative mechanism called reconciliation that allows exceptional bills to be approved with only 50 votes.
Democratic leaders in Congress flank Treasury Secretary Janey Yellen (Reuters)
Democrats, however, have been debating among themselves for weeks how to use this mechanism to pass Biden’s economic agenda, so adding the debt issue to it will in all likelihood result in more discussions and delays.
The Secretary of the Treasury, Janet Yellen, has warned that, if a new debt limit is not approved, the United States could enter into suspension of payments of the national debt in October, a situation with harsh consequences: the interest rates of the American debt They would skyrocket, the stock market would crash, and tens of millions of soldiers and retirees would have no income. In addition, a new recession could occur with millions of lost jobs.
This debt ceiling situation, which drives the United States into the abyss every few years, occurs because the government spends much more money than it gets through federal taxes. In 2021 alone, it is estimated that the government will incur expenditures of 5.8 trillion and have 3.5 trillion in revenue, leaving a deficit of 2.3 trillion, according to the Congressional Budget Office.
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.
Lawmakers have negotiated raising the debt limit for decades. But the will to push the world’s largest economy to the brink dates back to 2011, when Republicans set out to curb Democratic spending and used the cap to do so.
“Most of the (Republican) leaders consider that the confrontation over the debt limit of 2011 was, ultimately, a success, since they were able to force (then-President Barack Obama) to sign what was the largest bill of bill to cut spending in decades without defaulting, “said Brian Riedl, who was then chief economist to Republican Sen. Rob Portman.
The deal they struck was intended to cut government spending over the years.
But it was not fulfilled: the national debt and the budget deficit of the United States have skyrocketed in the following years due to the spending of the Republican and Democratic presidents.
(With information from EFE and AFP)
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