WASHINGTON, Oct. 14 (Xinhua) -- U.S. President Joe Biden on Thursday signed a short-term bill to temporarily increase the nation's borrowing limit, averting a looming debt default that would cause an economic catastrophe.
Biden's signature came two days after the U.S. House of Representatives voted along party lines to approve the bill. The Senate cleared the short-term debt limit extension last week.
The temporary measure would raise the federal government's debt limit by 480 billion U.S. dollars, allowing the U.S. Treasury Department to meet obligations through Dec. 3 and giving lawmakers a few more weeks to find a way to address the issue.
U.S. Treasury Secretary Janet Yellen recently warned that lawmakers have until Oct. 18 to raise or suspend the debt limit before the federal government will likely run out of cash and extraordinary measures, possibly leading the United States to default on the national debt.
Another stopgap measure to fund the federal government also expires on Dec. 3, meaning Democrats and Republicans will have to reach a deal by early December to avoid the twin threats of a shutdown and a default.
In a letter to President Biden last Friday, Senate Minority Leader Mitch McConnell, however, said that he will not provide "such assistance" again if his "all-Democrat government" drifts into another "avoidable crisis," adding the Democrats had three months' notice to handle the issue.
McConnell has repeatedly argued that Democrats should deal with the debt limit crisis on their own, since they control both chambers of Congress and the White House, while complaining about Democrats' lack of bipartisanship in crafting major spending bills.
"The Republicans are eager to campaign on their familiar slogan of the Democrats being 'big spenders and tax raisers,'" Greg Cusack, a former member of the Iowa House of Representatives, a longtime Democrat, recently told Xinhua.
Democrats, meanwhile, are reluctant to raise the national debt limit on their own, fearing that doing so while also trying to pass a large social spending package along party lines could open them up to criticism of being fiscally irresponsible, experts have said. Disagreements within the party might also dash Democrats' hopes of going it alone.
Democrats have repeatedly argued that raising the debt limit does not authorize new federal spending, but only allows the Treasury Department to borrow additional funds to cover expenditures that have already been approved by Congress, including COVID-19 relief bills and the tax cuts rolled out during the previous administration of President Donald Trump.
"The mounting political brinkmanship over the debt limit is thus painful to watch," said Mark Zandi, chief economist of Moody's Analytics.
"If lawmakers are unable to increase or suspend the debt limit before the Treasury fails to make a payment, the resulting chaos in global financial markets will be difficult to bear," Zandi said.
Noting that it's "highly unproductive" for lawmakers to bicker over the U.S. debt ceiling, International Monetary Fund (IMF) Chief Economist Gita Gopinath said Tuesday that the IMF has called for a long-term solution, a point that the multilateral lender has been making for a while.
"And that could be done by replacing the debt ceiling with some kind of a medium-term fiscal target, as opposed to the debt ceiling, or, automatically raising the debt ceiling whenever, to be in line with whatever it is in terms of taxes and appropriations that the Congress has approved, so it happens automatically," Gopinath said. Enditem
