By Michael Bowman – CAPITOL HILL — The U.S. Congress has raised the nation’s borrowing limit and averted a potential debt default that would have triggered devastating financial consequences. Senate approval came one day after the House of Representatives passed the measure – and less than two weeks before the federal government would have been unable to pay all its bills.
Another fiscal showdown has ended, with Republican lawmakers once again dropping demands for concessions in return for keeping the U.S. government funded and solvent. Republicans had contemplated pressing for changes in President Barack Obama’s health care law, as well as approval of a controversial oil pipeline from Canada.
In the end, the Republican-led House of Representatives passed a conditions-free, or “clean” debt ceiling increase with mostly Democratic votes. On Wednesday, the Democratic-led Senate approved the measure 55 to 43, with all Democrats and no Republicans voting in favor.
Senate Majority Leader Harry Reid described raising the debt limit as an economic imperative.
“Defaulting on bills would devastate the economy and erase the past five years of recovery. Financial leaders have warned Congress again and again and again that even the threat of default ripples quickly through the economy. We cannot default on our obligations,” said Reid.
Raising the debt ceiling gives the U.S. Treasury renewed authority to borrow money, and will allow the federal government to pay its bills until early next year.
But Republican senators complained that, while the immediate threat of a debt default has been lifted, America’s long-term fiscal imbalances remain unaddressed. Senator Jeff Sessions said Congress is ill-serving the American people.
“They expect us to manage their money wisely. They expect us not to put the country at financial risk. And they have every right – and a responsibility as citizens of this country – to be angry with their Congress, to be angry with their president, for running up this kind of debt,” said Sessions.
The national debt stands at more than $17 trillion. The federal deficit has been cut in half in recent years, and, as a result, the pace of U.S. debt accumulation has slowed. Absent fiscal reforms, the deficit is expected to grow again beginning in 2016, necessitating larger or more frequent debt ceiling increases well into the future.