Senate temporarily extends debt limit

The Senate has voted to temporarily extend the debt limit to avoid a default that many experts feared would have crushed the economy.

Senators agreed 50/48 to increase the limit by $480bn which will cover till December.

The bill was approved after weeks of debates, and infighting within the Democratic Party. The US was just two weeks away from a default but things still aren’t clear as it moves to the House where Democrats are still busy fighting one another.

Once approved by the House, it will go to President Biden. Senate Minority leader Mitch McConnell healed things by offering support for a short-term extension.

Senate Republicans have held the Democrats responsible for raising the debt limit as they hold the majority and government.

The Democrats hold the majority in the House and a tight one in the Senate, but still want Republican support for the bill. Raising Republican fears that the calls for participation are a trap, part of a backup plan of the Democratic Party if things go bad.

They want to go on a mindless spending spree in sectors with no return, consequentially burdening the taxpayer further.

However, Senate Majority leader Chuck Schumer has accused the Republicans of playing a dangerous game. Several Republicans have also criticized Minority leader McConnell for cracking a deal with Majority leader Schumer.

Things are further heating up in both chambers and if they don’t come to an understanding. We may see turmoil that could be catastrophic for the World’s economy.

Lawmakers will now need to address the issue in December to avoid a default. More than that, they need to come up with plans to quickly repay the climbing debt.

As the US spends more money than it collects, it has to borrow money to survive. The Treasury issues bonds once the limit is extended.

Congress often acts in a bipartisan manner when it comes to increasing the limit.

This time however, the infighting within the Democratic Party and Republican criticism over the spending plans has left it hanging.