US Democrats unveil plans to suspend debt limit

US Democrats unveil plans to suspend debt limit

21/9/2021 2:01:00 AM

US Democrats unveil plans to suspend debt limit

WASHINGTON: Democratic congressional leaders on Monday (Sep 20) unveiled plans to suspend the nation\u0027s borrowing limit, following a White House warning of \u0022economic catastrophe\u0022 unless that ceiling is raised. The legislation also would fund the government through the end of the year after the current

WASHINGTON: Democratic congressional leaders on Monday (Sep 20) unveiled plans to suspend the nation's borrowing limit, following a White House warning of"economic catastrophe" unless that ceiling is raised.The legislation also would fund the government through the end of the year after the current budget lapses on Sep 30.

Volaris in El Salvador set to accept bitcoin The coronavirus is still mutating. But will that matter? Raeesah Khan yet to turn up for interview over alleged rape case: Police

But the fate of the plan is unclear since Republicans have vowed to withhold support for raising the debt ceiling, which is needed to fund spending already approved by lawmakers, including the massive rescue packages rolled out during the COVID-19 pandemic.

"The American people expect our Republican colleagues to live up to their responsibilities and make good on the debts they proudly helped incur," Democratic Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi said in a joint statement.

They warned that"a reckless Republican-forced default could plunge the country into a recession".Democrats have the majority in both houses of Congress, but the slim margin in the Senate means they will need some Republican support to push it through, since a single Senator can block any legislation that has less than 60 votes.

The measure would suspend the debt limit through December 2022 - after the midterm congressional elections.It also would keep the government running through the end of the year while legislators continue to debate two massive spending Bills - an eight-year US$1.2 trillion

infrastructure packageand a 10-year US$3.5 trillion package with a host of social programmes, largely paid for by rolling back tax cuts.Schumer and Pelosi said the measure unveiled on Monday would avoid"an unnecessary government shutdown", and called it"must-pass legislation."

It will also include funds for disaster relief and Afghan evacuee resettlement, with the White House asking for US$20 billion for hurricane and wildfire aid and US$6 billion for tens of thousands of Afghan refugees."We look forward to passing this crucial legislation with bipartisan support through both chambers and sending to the president's desk in the coming weeks," they said.

Grapefruit-sized hail hits Australia's east coast 7 more COVID-19 deaths, 3,994 new cases in Singapore; MOH monitoring whether 'post-weekend surge' is temporary This Singapore hotel is giving away a free wedding banquet

But Republican Senate leader Mitch McConnell once again said Democrats should go it alone."They just want bipartisan cover so they can pivot as fast as possible to ramming through an historically reckless taxing and spending spree on a pure party-line vote," he said on Twitter.

That is a stark contrast from his position in 2019, when Republican Donald Trump was president and McConnell argued that failing to raise the borrowing cap"would be a disaster."Related:"SHAME, SHAME"Schumer called McConnell's current stance"crass, craven".

"Shame, shame on the Republican Leader," he said in comments on the Senate floor. After pushing for tax cuts, pandemic spending and previous increases in the debt ceiling"what Republicans are doing is nothing short of a dine-and-dash of historic proportions".

US Treasury Secretary Janet Yellen has warned that without an increase the government will run out of cash to fund operations and pay its debts sometime in October.Failing to raise the debt limit"would produce widespread economic catastrophe" and"compound the damage of the continuing public health emergency", she said in a column on Monday in The Wall Street Journal.

The debt ceiling has been raised about 80 times since the 1960s, but the issue has frequently been a political football in polarised Washington, with Republicans engaging in brinksmanship multiple times during the administration of Democrat Barack Obama.

In the aftermath of that conflict in 2011, the United States lost its coveted"AAA" debt rating from Standard and Poor's. That sent shockwaves through the markets.But under Trump, Democrats supported Republican efforts to suspend the debt limit for two years.

IMF chief economist Gopinath to leave Fund, return to Harvard in January WP's Raeesah Khan yet to respond to police on alleged mishandling of rape case: SPF Israeli diver finds 900-year-old crusader sword

The ceiling was reinstated on Aug 1 with debt at US$28.4 trillion, and the Treasury is already shuffling government funds around to continuing paying the bills.EXTRAORDINARY MEASURESYellen, who had a phone call with McConnell last week, said even waiting until the last minute could cause a cascade of financial disasters including rising borrowing rates and 50 million seniors missing their government payments.

The Bookings Institution said the 2011 debt limit showdown raised Treasury borrowing costs by US$1.3 billion, and in the 2013 impasse - when Congress waited until the last minute to raise the debt ceiling - investors dumped Treasury securities, and"those effects ripple throughout financial markets".

Treasury already has begun taking what it calls extraordinary measures to keep from breaching the cap on borrowing, but the steps will become increasingly stringent as the drop dead date approaches.These include not investing in savings plans and retirement funds for government employees.

Read more: CNA »

Covid-19: Coffee shops must designate ‘fixed point’, such as drinks stall, to check patrons’ vaccination status

US opens probe into 30 million vehicles over air bag inflatorsWASHINGTON: US auto safety investigators have opened a new probe into 30 million vehicles built by nearly two dozen automakers with potentially defective Takata air bag inflators, a government document seen by Reuters shows. The National Highway Traffic Safety Administration (NHTSA) on Friday opened a

France's OVHcloud prepares for US$ 4.7 billion IPO- WSJFrench cloud computing services provider OVHcloud plans to launch a possible initial public offering as soon as Monday that could value it at more than US$4.7 billion, the Wall Street Journal reported on Sunday, citing people familiar with the matter. The cloud-service provider

Body found matching description of US missing woman Gabby Petito: FBIWASHINGTON — US law enforcement said Sunday (Sept 19) a body found in a US national forest in Wyoming, where a search was underway for Gabrielle

North Korea says US submarine deal, alliance could trigger 'nuclear arms race'SEOUL — North Korea's foreign ministry on Monday (Sept 20) said a new United States (US) alliance in the Indo-Pacific and recent US submarine contract with Australia could trigger a

Greek PM says climate crisis is with us and cost of ignoring it 'unimaginable'ATHENS: Mediterranean nations must lead the way in addressing climate change, the Greek prime minister said, warning that the cost of doing nothing was unimaginable, with mankind possibly struggling to survive beyond the turn of the next century. Greece, Turkey, Cyprus and Spain were ravaged by wildfi

US trade official called India's Mastercard ban 'draconian': EmailsNEW DELHI: A senior US trade official privately criticised India\u0027s July decision to ban Mastercard from issuing new cards, calling it a \u0022draconian\u0022 move that caused \u0022panic\u0022, according to US government emails seen by Reuters. The documents show frustration within the US government after India