US House of Representatives approves debt ceiling increase

Mith the House of Representatives approving an increase in the debt ceiling, an impending default by the US government has been temporarily averted. The Chamber of Parliament joined on Tuesday evening (local time) with a majority of Democrats on a corresponding proposal from the Senate from last week. The aim is to increase the debt ceiling by 480 billion US dollars (just under 416 billion euros) in order to give the government financial leeway at least until the beginning of December. US President Joe Biden has yet to sign the law.

An impending payment default, which would probably have catastrophic economic consequences, has only been postponed. An agreement on how to proceed from December is not yet in sight.

Fierce argument between Republicans and Democrats

The interim solution that has now been adopted was preceded by a violent dispute between Democrats and Republicans. The Democrats wanted to temporarily suspend the debt ceiling or raise it significantly. The Republicans opposed this, however. The struggle for a long-term solution should soon be back on the agenda.

Treasury Secretary Janet Yellen had warned of a possible financial crisis and recession should the US government fail to service its debts for the first time. According to your ministry, the US would have run out of money by October 18.

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