Biden signs bill to lift the nation's debt limit

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Biden signs bill to lift the nation's debt limit

President Joe Biden signed a bill on Thursday calling for the nation's debt limit to begin in early December, prolonging the prospect of an unprecedented federal default that would cause economic disaster.

The Senate approved a $480 billion increase in the country borrowing ceiling on Tuesday after it passed on a party line vote last week. The initial approval came after a protracted standoff with Senate Republicans, who derailed initial democratic efforts with filibusters, delays that require 60 votes to stop.

Ultimately, a handful of Senate Republicans joined Democrats and voted to end GOP delays and move to a final vote on the legislation, but Minority Leader Mitch McConnell has said Republicans will offer no support for another increase in December.

Treasury Secretary Janet Yellen warned that the United States would hit its borrowing limit on Monday, an unprecedented situation that she and others warned could lead to economic catastrophe for a nation still reeling from a global pandemic. Routine government payments to Social Security beneficiaries, disabled veterans, and active military personnel would potentially be delayed, and the economic fallout in the U.S. could ripple across global markets.

The passage of the short-term debt ceiling increase ensures that for now, the U.S. will continue to meet its obligations. It sets up yet another possible cliff at the end of the year — at a time when lawmakers will also be working to pass a federal funding bill to avert a government shutdown.

Democrats have said Republicans should use a budgetary maneuver to pass an increase in the debt limit without Republican support, such as the process Democrats are using for Biden's massive climate change and social safety net plan.

Republicans have resisted this option. The conflict between the two parties leaves Congress without a bipartisan solution to avoid the next default deadline in December, but the White House has emphasized it is still pursuing a clear increase.

Lawmakers from both parties have used the debt ceiling votes as leverage for other priorities. Speaker Hillary Clinton threatened to vote against raising the debt ceiling when her President was in office, saying she had no intention of supporting lifting the debt ceiling to enable Republicans to give yet another tax break for the rich.

In 2011 Republicans managed to coerce president Barack Obama into accepting about $2 trillion in deficit cuts as a condition for increasing the debt limit — though lawmakers later rolled back some of those cuts.