US Avoids National Default Crisis... Senate Passes Temporary Debt Ceiling Increase Bill (Comprehensive)

Democratic and Republican Agreement on Temporary Debt Ceiling Extension Passes Senate
No Default Risk Expected This Year
White House Pressures for Confirmed Debt Ceiling Increase, Not Temporary Measures
New York Stock Market Closes Higher for Two Consecutive Days

[Image source=EPA Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min, Reporter Kim Su-hwan] The bill to temporarily raise the U.S. federal government debt ceiling has passed the U.S. Senate. As a result, an unprecedented U.S. national default will be avoided until December. With the worst crisis averted, the New York stock market closed higher.

On the 7th (local time), CNBC reported that the Senate passed the bill to raise the federal government debt ceiling, which was agreed upon by both parties that afternoon.

Before the bill's passage, in a vote to end the filibuster (unlimited debate), all 50 Democratic senators and 11 Republican senators voted in favor, ending the filibuster. In the final vote on the bill, only Democratic senators voted in favor, passing the bill.

Accordingly, the temporary debt ceiling increase bill was submitted to the House of Representatives. Since the Democrats currently hold the majority in the House, the bill is expected to pass smoothly.

Earlier that day, according to the political media outlet Politico, Senate Majority Leader Chuck Schumer announced that he had reached an agreement with the Republicans to raise the U.S. debt ceiling by $480 billion until December 3.

As a result, the U.S. debt ceiling will increase from the previous $28.4 trillion to $28.88 trillion. With the debt ceiling raised, the U.S. government's fiscal operations are expected to have more breathing room.

Previously, the debt ceiling suspension period ended in July, and the ceiling was reapplied starting August 1. At that time, since the federal debt had already exceeded the limit, the Treasury Department secured the necessary funds for government budget execution through remaining cash and emergency measures.

This agreement was reached after the Republicans proposed a temporary debt ceiling increase the day before, which the Democrats accepted.

U.S. Treasury Secretary Janet Yellen warned that if the debt ceiling is not raised or extended by the 18th, the U.S. would face a default situation, repeatedly urging congressional action.

Politico noted that although the debt ceiling extension deadline is set for December 3, even if no further extension is made by then, it is expected to take longer for the Treasury to face a default. This means the U.S. Congress has effectively set an additional negotiation deadline until the end of the year.

CNBC reported, "Before the December debt ceiling extension deadline, the Democrats will work to resolve internal conflicts over the Biden administration's infrastructure development budget and seek agreement with the Republicans."

The White House welcomed the agreement but emphasized that the Republicans must engage sincerely in the debt ceiling negotiations. White House Deputy Press Secretary Karine Jean-Pierre told reporters aboard Air Force One that day, "(The debt ceiling negotiations) should not become a political game," adding, "We will not give up efforts to raise the debt ceiling."

Ultimately, the temporary extension of the debt ceiling has averted the worst-case scenario, but if no bipartisan agreement is reached on the debt ceiling and infrastructure development budget by December, there is a possibility of facing another default crisis.

Following the news of the debt ceiling extension agreement, the New York stock market showed strength that day. The Dow Jones Industrial Average rose 0.9%, the S&P 500 increased 0.8%, and the Nasdaq Composite gained 1%.

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