However, avoiding the closure does not mean that another crisis has been overcome.
This is the starting point: The first round of the bitter dispute over the US budget has been settled. On Thursday, Congress paved the way for a transition budget to prevent a government shutdown in the midst of the coronavirus pandemic. After the Senate, the House of Representatives also approved the transitional budget. However, avoiding the closure does not mean that another crisis has been overcome.
The essence of the debt ceiling: The House passed the government’s interim funding plan last week with a Democrat vote. But Republicans resisted in the Senate. They complained that the bill also provided for a suspension of the debt ceiling for the time being – which they rejected. In the end, Democrats had to separate the two questions in order to avoid shutdown and get the Senate budget bill.
The United States threatens to default: According to Treasury Secretary Janet Yellen, if Congress does not raise the debt ceiling, the US government is in danger of defaulting in October. According to Lilin, it may be in mid-October. The consequences are likely to be dire not only for the United States, but also for the global economy. Yellen said the debt ceiling has been raised or suspended 78 times since 1960, always with bilateral support. I have spoken in favor of repealing the Debt Ceiling Act. Yellen said Thursday at a House hearing that the current debt-ceiling law is very “destructive.”
Disagreement over economic and social packages: President Joe Biden is currently struggling to push through two major projects during his tenure in Congress: a large-scale package of investments in the country’s infrastructure and a second massive package of social investments. Both projects remain shaky in the face of internal debates among Democrats. Decisions are expected this week as well.
Possible agreement: And on Thursday, the House of Representatives will vote on the trillion-dollar infrastructure program. The Senate has already given the green light for this – with Republican support – and the bill will also have a majority in the House.
Possible problems: Many left-wing Democrats tie their votes to guarantees that, with their approval, the controversial Second Package, which provides $3.5 trillion for social purposes and climate protection measures, will also be supported. Democratic leaders are warning that internal partisan strife may once again delay a vote on the infrastructure program companies crave.
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