President Joe Biden on Thursday signed a bill raising the nation's borrowing limit by $2.5 trillion, avoiding a potentially catastrophic default and resolving the turbulent issue until after the 2022 midterm elections.
The House voted early Wednesday to raise the debt limit, amid urgent warnings from Treasury Secretary Janet Yellen that further delay would jeopardize the full faith and credit of the United States. The near-party-line 221-209 House vote, with only Illinois GOP Rep. Adam Kinzinger joining Democrats, came after the Senate Democrats also voted to raise the government's borrowing authority.
The Senate vote required a workaround to allow it to pass on a simple majority under a deal struck between party leaders to diffuse the issue until after next year’s midterm elections, though saddling majority Democrats with a tough vote. Republicans used the debt limit to attack Democrats’ big-spending social and environmental agenda while pledging to staunchly oppose the effort to increase the threshold.
Despite a seemingly straightforward name, the nation’s debt limit does little to curtail future debt. Established in 1917, it instead serves as a brake on spending decisions already endorsed by Republicans and Democrats alike — in some cases decades ago — that if left unpaid could cripple markets, send the economy into a tailspin and shake global confidence in the U.S.
Additional reporting by The Associated Press.