President Joe Biden of the United States has signed a bill into law that gives him the ability to raise the federal government’s debt limit by $2.5 trillion, averting a debt default.
According to Xinhua news agency, the decision came on Thursday after the US Congress gave final approval to a legislation that would expand the debt limit to about $31 trillion, which would cover the federal government’s borrowing through 2023.
“Instead of risking the country’s full faith and credit, politicians opted to raise the debt ceiling. But this was far too late and drove our economy dangerously close to collapse “In a statement released Thursday, Maya MacGuineas, President of the Committee for a Responsible Federal Budget, said.
“We have a couple of years before we have to increase the debt ceiling again in Washington. Before then, policymakers should focus on the difficult task of crafting a plan to begin dealing with our crippling debt. Both parties are to blame for our near-record levels of debt, and they must work together to address the problem “MacGuineas threw in his two cents.
If Congress fails to extend the debt limit, the federal government could be unable to pay its obligations as soon as December 21, according to the Bipartisan Policy Center, a Washington, D.C.-based think tank.
Failure to pay the country’s obligations on time could have immediate ramifications throughout the global economy, the research tank warned, particularly amid a period of economic recovery and heightened concern over a new Covid-19 version.
The debt limit, sometimes known as the debt ceiling, is the maximum amount of money the US government can borrow to meet its current legal obligations, including social security and Medicare payments, interest on the national debt, and other liabilities.