Nancy Pelosi, the US House Speaker (D-CA), speaks with reporters at her weekly news conference held on Capitol Hill in Washington, September 23, 20,21.
Tuesday's approval by the House of Representatives of legislation to increase the U.S. debt limit was the last legislative hurdle in preventing a national default, which was expected to happen next week.
After being passed by the Senate last Wednesday, the bill now goes to President Joe Biden's desk, where he will sign it and make it effective. It is likely that he will sign it this week, and possibly Wednesday.
The legislation passed the House with a party line vote of 219 to206. It is the result of an agreement between Senate Minority Leader Mitch McConnell (R-Ky.) and congressional Democrats. It would increase the debt ceiling by $480 million.
Current national debt stands at $28.4 trillion. It would be allowed to increase to $28.8 trillion.
Although the president is expected to sign the bill, it has been warned that failure to do so could cause economic calamity by October 18, as Treasury Secretary Janet Yellen warns.
CNBC reported that the president's top economic adviser had told CNBC in October that she "fully expected" a U.S. recess if the government ran out money to pay its bills, and thus triggered an unprecedented default.
Debt ceiling extensions or suspensions do not authorize any new government spending. However, they allow the Treasury Department and Congress to pay for existing appropriations.
The extension of the debt limit is expected to allow government to cover its expenses until Dec. 3, House Speaker Nancy Pelosi (D-Calif.) said Tuesday during a press conference. Recent reports suggest that the $480 billion increase could continue into December.
Even though the drop-dead date for December is later, it will not mean much to lawmakers, Ed Mills, a Raymond James policy analyst.
Mills said Tuesday morning McConnell created the $480 billion plan that would force Congress to address the debt limit once again before the legislature pauses for the holidays.
Mills stated that "this is structured in such a way that December's debt limit must be addressed in December to the maximum extent possible," when Mills was reached by telephone.
"Is it earlier in December? Is it January 1? He said that it was semantics at this point. "When Congress finishes in December, they will want to go home and not return to a ticking bomb of an issue."
