After an intense debate on the debt ceiling, the US House of Representatives voted overwhelmingly on the new debt ceiling bill. Debt ceilings have become a significant concern for the US economy and its citizens. Here are all the details.
House votes on what is the debt ceiling bill?
On Wednesday, May 31, 2023, the House of Representatives voted to suspend the debt ceiling law. According to the Secretary of the United States House of Representatives, the bill was passed by a vote of 314 to 117. This bill and approval will be forwarded to the Senate for consideration.
Source: Office of the Secretary, United States House of Representatives
Joe Biden mentioned on his Twitter “Tonight, the House of Representatives took an important step toward averting the first bankruptcy and safeguarding our nation’s historic and hard-earned economic recovery.”
The law was passed just five days before the deadline set by the Treasury Department, in a letter to House Speaker Kevin McCarthy, the Treasury Department said it would run out of money on June 5, 2023, if the Debt term may not be raised or suspended. The letter also states that the National Treasury will have to take special measures if the funds run out.
Then, on May 31, 2023, the Treasury Department published a list of emergency measures it would take to repay the US government’s debt.
This is what is stated, “Treasury ministers in both Republican and Democratic administrations used their authority to take a number of emergency measures to prevent the United States from defaulting while Congress debated raising debt limit.”
What is a debt ceiling agreement?
In May 2023, the US government hit the debt ceiling. If the debt ceiling is not raised, the government will be forced to default. This will have a devastating effect on the economy, as it will lead to a loss of confidence in the US government and raise interest rates.
To prevent default, President Biden and Speaker of the House Kevin McCarthy reached a compromise on May 27, 2023. The compromise resulted in a bipartisan budget agreement that no one was entirely satisfied with. satisfied with the terms.
The compromise led to a new bill calling for a suspension of the US debt limit until January 1, 2025. This would allow the government to continue to borrow money and pay its bills.
READ| Explanation: What is the new debt ceiling agreement? Get notified about important announcements
What’s next?
The US debt ceiling bill will be introduced to the Senate, where it is expected to face an even bigger backlash. Senate Republicans have been more opposed to raising the debt ceiling, and it’s unclear if they’ll be willing to support the bill. The debt bill is a budget bill that forces the Senate to resort to mediation.
Mike Lee, a Republican senator, mentioned in a letter to Senate Majority Leader Chuck Schumer that he and 43 other senators would not consider any bill that would increase the debt.
Here’s what the letter says”As a result, we will not vote to repeal any legislation that raises the debt ceiling without substantial spending and budgetary reforms.”
Under mediation, the Senate passed the budget bill by a majority vote, requiring 60 votes. Democrats do not have a 60-vote majority in the Senate, so they would need at least 10 Republicans to vote in favor of the bill to pass.
However, it is possible that some Republicans are willing to vote on the bill to avoid a national default.
In short, if the Senate fails to pass the debt ceiling bill, the government will be forced to default on its debt. This will have a devastating effect on the economy, which is something everyone wants to avoid. Therefore, it is possible that both Democrats and Republicans will reach a compromise and pass the debt ceiling decision in the Senate.
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Source: vcmp.edu.vn