Washington – The US House of Representatives narrowly approved an increase in the debt ceiling last night. But she made it conditional on extensive budget cuts in the next ten years, which, according to Reuters, the Senate will probably reject. Like President Joe Biden, his Democratic majority demands an increase in the debt ceiling without any conditions. If no agreement is reached on the increase, the US government will not be able to borrow more money from the summer, which would cripple the US authorities and have serious consequences for the world economy.
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In the Republican-controlled lower house of parliament, 217 lawmakers voted in favor of the proposal, while 215 voted against it.
Republicans believe the move will force Democrat Biden to negotiate spending cuts they consider necessary. But Biden rejects the bill. In response to the vote in the House of Representatives, the White House said the proposal had no chance of becoming law, saying it would harm the middle class and working families.
Also, according to the leader of the Democratic majority in the Senate, Chuck Schumer, the bill is already “dead”. According to him, the Republican legislation “only brings the US dangerously close” to the historic insolvency of the country, which would shake markets and economies around the world.
The Ministry of Finance estimates that if the debt ceiling is not increased, it will not be able to or a little later in the summer to pay their obligations. The government would also lose the ability to finance social programs and pensions, which, according to experts, would have very serious consequences for the American and world economy. According to Biden, Republicans must act to avoid insolvency.
Political battles have been fought repeatedly in the United States in recent years to extend the funding of federal agencies. In their latest round, the Republicans are proposing to increase the debt ceiling by 1.5 trillion dollars (32 trillion crowns) and at the same time demand a reduction in spending in the areas of social support and climate protection. Democrats want a raise with no strings attached, just as they did three times under Biden's predecessor, Donald Trump.
