WASHINGTON (AP) — President Joe Biden on Thursday signed into law a bill raising the nation’s debt limit through early December, delaying the possibility of an unprecedented federal default that would cause economic disaster.
The House passed the $480 billion increase in the country’s debt ceiling on Tuesday after the Senate approved it in a party-line vote last week. The final approval came after a protracted standoff with Senate Republicans who derailed the Democrats’ initial efforts with filibusters, delays that required 60 votes to stop.
Ultimately, a handful of Senate Republicans agreed to join the Democrats and voted to end the GOP delays and pass a final vote on the bill, but Minority Leader Mitch McConnell said Republicans would not offer support for another increase in December.
Treasury Secretary Janet Yellen warned that the US would hit its borrowing limit on Monday; The unprecedented situation he and others have warned could spell economic disaster for a nation still affected by a global pandemic. Routine government payments to Social Security beneficiaries, disabled veterans, and active-duty military personnel could potentially be delayed, and the economic fallout in the US could ripple through global markets.
The passage of the short-term debt ceiling increase allows the United States to continue meeting its obligations for the time being. But at a time when legislators will also be working to pass a federal funds bill to prevent the government from shutting down, the end of the year presents another potential gulf.
Republicans have said Democrats must use a budget ploy to pass an increase in the debt limit without Republican support, much like the process Democrats used for Biden’s major climate change and social safety net plan. However, Democrats resisted this option. The conflict between the two parties leaves Congress with no clear solution to avoid the next default date in December, but the White House has emphasized that it is still pursuing a bipartisan increase.
MPs from both parties used their debt ceiling votes as leverage for other priorities. House Speaker Nancy Pelosi threatened to vote against raising the debt ceiling while President Donald Trump was in office and said she had no intention of supporting removing the debt ceiling to get Republicans to give the rich another tax cut. And in 2011, Republicans succeeded in forcing President Barack Obama to agree to his nearly $2 trillion deficit cut as a condition of increasing the debt limit—though lawmakers later retracted some of those cuts.
Associated Press writer Kevin Freking contributed to this report.