Republicans in the US Senate on Monday blocked a proposal that had already been approved in the House of Representatives and aimed at financing the federal government and lifting the debt ceiling.
The proposal was intended to avoid a “shutdown” by the federal government and a potential default on the repayment of the US debt.
This lead comes after Republicans urged Democrats to go it alone on the debt cap issue, which now leaves Congress without a clear plan to keep the government afloat from Sept. 30, reports CNN.
Sept. 30 is the date on which the current government funding expires, and the 2022 budget is supposed to go into effect the day after. avoid a stoppage of federal public services from mid-October (when the available money “runs out”), and it will be necessary to suspend or increase the country’s debt limit in the coming weeks to prevent a “default”, stresses CNBC.
According to the same publication, Democrats could be forced to suspend the debt ceiling on their own initiative, potentially with a tweaking of their proposal for the budget for the country’s next fiscal year. [que tem início em outubro] worth $3.5 billion in additional investment.
CNN also emphasizes that it is possible that the Democrats may decide to withdraw from the federal funding proposal the theme of suspending the debt ceiling, trying, instead, to get the approval – as has happened before – the provisional project that allows the US federal agencies can continue to be funded. This legislative measure is known as the continuity resolution. While there is no final agreement for the federal budget, the “shutdown” is thus avoided through this short-term financing solution. [“stopgap spending bill”].
The stopgap bill that the House of Representatives approved last week would finance and keep the government “open” until December 3rd. In addition, the measure included a suspension of the debt ceiling until December 16, 2022. The clock is ticking to resolve the debt limit issue and Congress may only have until mid-October – when the federal government will no longer be able to pay its bills, says CNBC.
The Senate voted today the procedural motion to advance this stopgap bill, but it took 60 votes to get the green light, which did not happen. Since Democrats control only 50 seats in this upper house of Congress, they needed 10 Republicans to vote in favour.
The so-called “debt ceiling” – the maximum amount of debt the federal government can issue to the public and other federal agencies – has often been suspended in the US as a short-term solution to resolve the federal budget’s non-approval impasses for a new fiscal year.
On Aug. 2, US Treasury Secretary Janet Yellen announced measures to avoid reaching the government’s funding limit and urged Congress to raise or suspend that ceiling. The new measures included suspending reinvestments by various pension funds in favor of civil servants and postal workers – something that will resume once the debt limit is lifted or raised, Yellen said at the time.
Source: Jornal de Negócios by www.jornaldenegocios.pt.
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