Last Minute Agreement to Raise Debt Ceiling
Economic Policy Brief #130 | By: Rosalind Gottfried | December 12, 2021
Header photo taken from: Komo News
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Photo taken from: The Washington Post
After persistent bickering Senators Mitch McConnell and Chuck Schumer reached a procedural agreement allowing the Senate to pass an increase in the debt ceiling with a simple majority. This bill passed Thursday and is likely to quickly lead to an increase in the debt ceiling of 2-2.5 trillion dollars, which will cover the government’s debt payments through next year’s election.
A vote on the increase will be accomplished in the early part of this week in order to accommodate December 15th payments that would otherwise be defaulted on. The bill allowing the increase was attached to another bill postponing automatic decreases in Medicare, Farm aid, and other mandatory spending programs. The passage of this bill does not authorize any new spending. Congress will have to work quickly to pass Biden’s safety net program before Christmas. Biden is negotiating an amount of between 1.75 and 2.5 trillion dollars.
Photo taken from: Brennan Center for Justice
The Republicans refusal to condone raising the debt ceiling is temporarily suspended by this last-minute agreement and does not indicate a change of heart even among the ten Republicans who voted for the passage of the bill.
Likely it was an emergency mission to side step default and avoid a global crisis in response to any failure to pay our debts.