The US Congress has passed a decision to rise the debt ceiling by $2.5 trillion to $31.4 trillion.
The goal of the US Congress is to prevent any default on the debts of the Treasury Department in the coming weeks.
The House of Representatives passed the decision by 221 to 209 votes. The decision will be sent now to President Joe Biden for his signature, to become law after a lengthy debate.
The Senate had approved the rise in the debt ceiling, which was passed by 50 to 49 votes in the wake of a months-long standoff in Congress with Republicans seeking to force Democrats to raise the debt ceiling on their own from its current level of $28.9 trillion.
Last week’s deal between Senate Democratic Majority Leader Chuck Schumer and his Republican counterpart Mitch McConnell paved the way for Tuesday’s vote, bypassing normal House rules requiring the approval of at least 60% of the Senate to advance most legislation.
Treasury Secretary Janet Yellen urged Congress to raise the debt ceiling before Wednesday.
The increase is needed, among other things, to cover the debts accumulated during Donald Trump’s presidency, when they increased by about $7.85 trillion, partly due to comprehensive tax cuts and spending to combat COVID-19.
The debt-ceiling battle and another crisis, passing a bill to continue funding the government through February, took up much of Congress this month, and members of both houses are now looking to embark on extended recesses.
It is not yet clear whether congressional Democrats will be able to pass Biden’s $1.75 trillion “building back better” plan to bolster the social safety net and combat climate change by Christmas. Deep disagreements within the party over the size and scope of the package hamper that endeavor.
The United States pumped huge stimulus packages during the Coronavirus pandemic, which raised inflation to the limits of 7%.