September 30, 2022

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Republicans and Democrats agree to temporarily extend the debt ceiling

First change:

A crisis in the United States was averted this Thursday or at least temporarily after Republicans in the Senate announced an agreement to extend the country’s debt capacity. The deal, which has not yet been voted on, will last until December 3, when Congress will face a new deadline to raise the government’s debt ceiling.

“We have reached an agreement,” Democrat Majority Leader Chuck Schumer announced Thursday in the U.S. Senate.

After weeks of tensions between Democrats and Republicans, the two parties finally reached a tentative agreement that raised the country’s debt ceiling to $ 480,000 million, from the current $ 28.4 trillion to $ 28.9 trillion.

This temporarily avoids what Treasury Secretary Janet Yellen has announced, warning that this week Congress will “quickly sell too little resources” if it does not raise or suspend the country’s borrowing power. “Before October 18th.

The news came as a relief to the US government because for the first time in the country’s history the national debt was stopped from being paid off, and it has been on the market since major Wall Street codes began to rise.

After Senate Republican leader Mitch McConnell gave Democrats a chance on Wednesday, Democrats attacked a temporary settlement that would last until Dec. 3. McConnell agreed to raise the debt ceiling for two more months, saying failure to accept the deal would lead to chaos in the markets and an economic crisis in the United States.

Impossible “budget compromise”

McConnell’s offer put Democrats against the wall, and if they had not accepted the deal, it would have been a cannon fodder for Republicans, who would have used the opportunity to blame them for the economic catastrophe.

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It is two months since the debt ceiling was extended so as not to leave the Treasury department cashless. But Republicans have been announcing they will not vote for a permanent solution since June because they want to leave the issue to Democrats so they can agree to a debt increase.

One thing that could help is the so-called “budget reconciliation,” which would allow its approval without the support of any Republican. But Democrats do not want to do this because it can only be used once a fiscal year, and they plan to use it to fulfill President Joe Biden’s economic agenda.

The president’s plans include a $ 3.5 trillion social policy package and a $ 1 trillion bilateral infrastructure bill.

Biden is wary of the Senate deal

Shortly after the agreement was approved, President Biden expressed confidence that the agreement would be ratified because it was still pending a referendum.

“We need to see if the deal is done. I’m not sure about that yet,” the president said from Chicago.

Ahead of Biden’s statement, White House Deputy Spokeswoman Karen Jean-Pierre spoke at a news conference in Washington.

“It allows us to take a step forward and breathe a sigh of relief and avoid the catastrophic default we are approaching by Senator McConnell’s decision to play politics with our economy.”

Jean-Pierre criticized Republicans for saying the country “should not have reached the brink of default” and for not agreeing to take more and more protracted action.

For now, there is no date on the calendar for the Senate referendum. After this happens, the bill must be approved by a Democratic majority in the House of Representatives before it can be signed into law.

With EFE, Reuters, AP and local media