The Senate approves the bill on the debt ceiling and prevents the United States from defaulting | International
Since Alexander Hamilton, one of the founding fathers, agreed in 1790 to pay the Revolutionary War bonds at 100%, even though they traded well below their value, the United States has earned its reputation as a reliable country and has never declared the non-payment of its debt, even if it has once looked over the edge of the precipice. This time, the Senate has approved suspending the debt ceiling with only a few days to spare from the scheduled date for the federal government to run out of money, June 5. The president, Joe Biden, will be able to sign the law this Friday to avoid non-payment.
“America is a nation that pays its bills and meets its obligations, and it always will be,” Biden said in a statement sent by the White House moments after the final vote. In his note, he notes that senators from both parties have voted to protect economic progress and prevent the first default in US history.
The Senate has approved the same legal text that left the House of Representatives on Wednesday, without touching a comma, despite the anger of some senators. Any amendment would have implied that the law would have to be voted on again by the Lower House, delaying the process at a time of maximum urgency.
The senators have been rejecting all the amendments one by one in a marathon session until around 11:00 p.m. in Washington (5:00 a.m. on Friday in mainland Spain) the plenary has definitively voted in favor of the norm. Senate Majority Leader Chuck Schumer has said the bill's passage means "America can breathe a sigh of relief." “We are avoiding default,” he added.
The law will take effect when signed by Biden. It suspends the debt limit (set so far at $31.38 trillion) until January 2025, that is, for the remainder of Biden's presidency, in exchange for cuts in some spending items and other measures. Once signed, the Treasury will have a free hand to launch bills to raise money to finance the multimillion-dollar payments of 92,000 million dollars (about 85,000 million euros) scheduled for next week.
The final vote has been 63 votes in favor of the rule and 36 against. The most radical of both parties reject the rule for opposite reasons. The cuts are too few, according to hard-line Republicans, and excessive, according to some Democrats. The agreement has been forged by Biden and by the speaker of the House of Representatives, the Republican Kevin McCarthy.
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"No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a great victory for our economy and for the American people," Biden said in his statement on Thursday. “Our work is far from done, but this agreement is a critical step forward, and a reminder of what is possible when we act in the best interest of our country. I look forward to signing this bill into law as soon as possible and addressing the American people directly tomorrow."
address to the nation
The White House has introduced a speech from the Oval Office of the White House at 7:00 p.m. in Washington on Biden's agenda this Friday. The agenda does not specify when he will sign the law. What he announces is that "he will address the nation" in prime time about the budget agreement and having avoided default. Somehow, the political battle to impose the most favorable story behind a compromise solution is underway.
The law changes some policies, including imposing new work requirements for some Americans receiving food aid and greenlighting an Appalachian gas pipeline that many Democrats oppose. The norm reinforces the funds for defense and veterans, cuts new funds for the tax agency and imposes automatic cuts of 1% if Congress does not approve their budgets annually.
Lindsey Graham, a senator from South Carolina, led a group of senators who complained that the increase in military spending contemplated in the agreement was not enough to keep up with inflation, especially given the extra spending from the Ukrainian war. Defense hawks managed to coax a statement from Schumer that the deal does not limit the Senate's ability to pass other emergency supplemental funds for national security, including Ukraine, or for disaster relief and other matters of national importance. .
The independent Congressional Budget Office said the package's spending restrictions would reduce the deficit by $1.5 trillion over the decade, a major goal of Republicans trying to curb the burden of Debt.
A default would have had catastrophic consequences for the economy. The White House Council of Economic Advisers released a report that the lockdown threat was already having an effect; a default episode, however short, would have left a costly bill, and a prolonged default would have pushed gross domestic product down 1.5% in the third quarter (at an annualized quarterly rate of 6.1%) and raised the unemployment rate five points, destroying 8.3 million jobs.
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