The US House of Representatives votes to raise the debt limit

The US House of Representatives has approved a bill that raises the debt ceiling. By a narrow majority of two votes, the Republican-dominated House of Representatives passed the proposal of its Speaker, Kevin McCarthy, on Wednesday evening (local time).

The draft envisages a $1.5 trillion (approximately CHF 1.34 trillion) increase in the debt ceiling, but only if significant government spending cuts are also made. The bill will now go to the Democrat-led Senate, where it will not stand a chance. President Joe Biden has also announced that he may want to veto it.

Republican move

Observers see the approval of the proposal as a tactical move by the Republicans to force Biden to the negotiating table. McCarthy wants Biden to agree to cuts in certain government spending that the Republicans disagree with. These are essential parts of Biden’s political agenda, such as investments in climate protection.

McCarthy’s influence is threatening bankruptcy of the US government. This would happen if the debt ceiling is not raised before the government runs out of money. According to the Independent Budget Office of the US Congress, it could happen between July and September. In this case, economic experts predict dire consequences for the US and the global economy.

“Now it’s up to you,” McCarthy told Biden right after the vote. The president could no longer endanger the US economy, the Republican said. In recent weeks, the White House has repeatedly indicated that Biden is willing to negotiate a draft budget.

However, contrary to what is envisaged in the bill that has now been adopted, these talks should not be linked to raising the debt limit. Republicans in Congress must act immediately and without obligation to avoid a default, White House spokeswoman Karine Jean-Pierre said in a statement after the vote. (sda/dpa)