Joe Biden signs bill raising U.S. debt limit, preventing a default

WASHINGTON, D.C., October 14 - President Joe Biden of the United States signed legislation on Thursday temporarily extending the government's borrowing ceiling to $28.9 trillion, deferring the debt default date until December.

The US Treasury had calculated that it would run out of money to pay the nation's debts by Oct. 18 if the debt ceiling was not raised. Biden's $480 billion increase in the borrowing cap is anticipated to run out by December 3.

After the Senate approved the $480 billion increase in the country's borrowing ceiling on a party-line vote last week, the House passed it on Tuesday. The final approval came after a protracted battle with Senate Republicans, who used filibusters to sabotage early Democratic efforts. Filibusters are lengthy delays that take 60 votes to end.

Ultimately, a few Senate Republicans joined Democrats and voted to stop GOP delays and move the bill forward to a final vote, although Minority Leader Mitch McConnell has stated that Republicans will not support another increase in December.

Treasury Secretary Janet Yellen had warned that the United States will reach its borrowing limit on Monday, an unusual position that she and others feared may spell economic disaster for a country still recovering from a global pandemic. Routine government payments to Social Security retirees, handicapped veterans, and active-duty military people might be delayed, with the resulting economic consequences reverberating throughout the world.

The passage of the short-term debt ceiling rise means that the United States will satisfy its obligations for the time being. However, it creates a new possible cliff at the end of the year, when lawmakers are simultaneously attempting to pass a federal funding bill in order to avoid a government shutdown.

Republicans have suggested that Democrats employ a budgeting technique to raise the debt ceiling without Republican approval, similar to how Biden's big climate change and social safety net proposal is being implemented. Democrats, on the other hand, have resisted this alternative. The two-party impasse has left Congress without a clear solution to avoid the next default deadline in December, but the White House has stated that a bipartisan increase is still being pursued.

Both parties have used the debt ceiling vote as a bargaining chip for other issues. When President Donald Trump took office, House Speaker Nancy Pelosi threatened to vote against raising the debt ceiling, claiming she would not support raising the debt ceiling to allow Republicans to offer another tax benefit to the wealthy. In 2011, Republicans forced President Barack Obama to accept approximately $2 trillion in deficit reductions as a condition for raising the debt ceiling, though some of the cuts were later reversed by lawmakers.

After the Senate vote, Senate Republican leader Mitch McConnell wrote to Biden, saying he would not help Democrats raise the debt ceiling again.

To increase borrowing authority, McConnell wants Democrats to utilise a procedural manoeuvre known as reconciliation, which does not require Republican votes. Democrats have ruled out that option as a way to raise the cap.

Because of Biden's proposed $3.5 trillion spending plan to invest in increased social services and address climate change, Republicans claim that lifting the debt ceiling is a Democratic problem.

Democrats point out that during Republican Donald Trump's presidency, they voted to extend the debt ceiling despite opposing major tax cuts that added to the debt.