Republicans in the US Senate have proposed to raise the US debt ceiling until December. It is not yet clear whether Democrats will agree to the plan, which offers only temporary relief. A vote has been postponed.
The US government is approaching the limit on the total amount it can borrow. If the $28.4 trillion ceilings are not raised soon, the United States may not be able to meet all its financial obligations before October 18. In that case, a new ‘shutdown’ threatens, in which the government has to stop some tasks temporarily. The issue has been a hot topic among US Congressmen for weeks.
“To protect Americans from a short-term crisis caused by the Democrats,” Republican Senate faction leader Mitch McConnell proposes a two-pronged plan. On the one hand, he wants the Democrats to approve an increase in the debt ceiling until December quickly. But, on the other hand, that should give the Republicans the necessary space for President Biden only to use Democratic votes to guide a longer-term solution through Congress.
This would involve a complicated parliamentary procedure (‘reconciliation’). Biden has said so far that he does not want to work that way because it is too risky. However, some Democrats reacted sceptically because it would only be a waste of time.
In a speech, US President Joe Biden previously clearly blamed for the deadlock on Republicans. He pointed out that Democrats in the House of Representatives have already passed a proposal to raise the debt ceiling. “My Republican friends need to stop playing Russian roulette with the economy of the United States.”
The announcement gave investors a sigh of relief. Then, after the Republican proposal launched, Wall Street erased the losses. The Dow-Jones index finally gained 0.3 percent to 34,416.99 points.