US Takes a Breather from National Default Crisis

Republicans Propose Temporary Debt Ceiling Extension
Democrats Also Support, Agreement Expected Soon
Negotiations Ongoing on Debt Ceiling Increase Amount
Historic US Default Crisis Averted, New York Stock Market Surges

Mitch McConnell, U.S. Republican Senate Majority Leader
Photo by AP Yonhap News

[Asia Economy=New York Correspondent Baek Jong-min] The U.S. Republican Party has proposed a temporary extension of the federal government debt ceiling until December. With expectations that the unprecedented national default in the U.S. can be avoided, the New York stock market sharply rebounded.

Mitch McConnell, the Republican Senate Majority Leader, announced on the 6th (local time) in a statement that he agreed to temporarily suspend the federal government debt ceiling until December. Leader McConnell said, "We will allow the normal processing of the debt ceiling temporary suspension bill pushed by the Democrats to protect Americans from the crisis caused by the Democrats."

The change in the Republican stance came after President Joe Biden and the Democrats pressured that an unprecedented national default would occur if the debt ceiling increase or extension failed, and that the Republicans would be held responsible.

President Biden also met with business leaders at the White House that day, criticizing, "The Republicans are playing Russian roulette," and discussed the potential impact on U.S. capital markets and individuals in the event of a national default caused by failure to raise the debt ceiling.

Janet Yellen, the Treasury Secretary who attended the meeting, also warned that failure to raise the debt ceiling would be fatal not only to individuals but also to companies, expressing concern that "Failure to raise the debt ceiling threatens the dollar's status as the global reserve currency and would be a disaster for the American people and U.S. industry."

The U.S. congressional media outlet The Hill reported that the Democrats are also signaling they may accept Leader McConnell's proposal. The Democrats postponed the procedural vote necessary to independently push for the debt ceiling increase, overcoming Republican opposition that day. Leader McConnell also told reporters in the evening, "An agreement will be finalized soon."

The Democrats and Republicans are also negotiating the amount of the debt ceiling increase. Democratic Senator Kevin Cramer mentioned that the Republicans proposed a $300 billion increase, and the Democrats want a larger amount.

As concerns about the unprecedented national default subsided, the New York stock market, which had been falling until that morning, immediately rebounded. The Dow Jones Industrial Average closed up 0.3%, the S&P 500 rose 0.4%, and the Nasdaq Composite increased by 0.4%.

This content was produced with the assistance of AI translation services.