Joe Biden signs US debt limit hike, but December standoff looms

Minority leader Mitch McConnell has said Republicans will offer no support for another increase in December.

Joe Biden
Joe Biden

President Joe Biden has signed into law a bill raising the US debt limit until early December, delaying the prospect of an unprecedented federal default that would cause economic disaster.

The House passed the 480 billion dollar (£354 billion) increase in the country’s borrowing ceiling on Tuesday, after the Senate approved it on a party-line vote last week.

The eventual approval came after a protracted standoff with Senate Republicans, who derailed initial Democratic efforts with filibusters, delays that require 60 votes to halt.

Ultimately, a handful of Senate Republicans agreed to join Democrats and voted to end GOP delays and move to a final vote on the legislation, but Minority leader Mitch McConnell has said Republicans will offer no support for another increase in December.

Treasury Secretary Janet Yellen had warned that the US would hit its borrowing limit on Monday, an unprecedented situation that she and others cautioned could lead to economic catastrophe for a nation still reeling from a global pandemic.

Routine government payments to Social Security beneficiaries, disabled veterans and active-duty military personnel would potentially be delayed, and the economic fallout in the US could ripple through global markets.

The passage of the short-term debt ceiling increase ensures that, for now, the US will continue to meet its obligations. But it sets up another potential cliff at the end of the year — at a time when lawmakers will also be working to pass a federal funding bill to avert a government shutdown.

Republicans have said Democrats should use a budgetary manoeuvre to pass an increase in the debt limit without Republican support, like the process Democrats are using for Mr Biden’s massive climate change and social safety net plan. But Democrats have resisted that option.

The clash between the two parties leaves Congress without a clear solution to avert the next default deadline in December, but the White House has emphasised it is still pursuing a bipartisan increase.

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