The bill went forward narrowly along party lines, with Democrats voting in favor.
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The debt ceiling battle was especially high stakes given the ongoingCOVID-19pandemic.
Experts forecasted potentialinterest ratespikes and plunging stock prices.
What is the debt ceiling?
When was the latest debt ceiling set to expire?
Those two years were up on Aug. 1.
This week, the debt ceiling was raised again by $2.5 trillion.
Where do things stand?
The House of Representatives followed suit.
Mirroring the House, the Senate enacted this fast-track process.
President Biden thensigned the billon Thursday and averted US default.
Senate Majority Leader Chuck Schumersaidthis increase was “commensurate with funding necessary to get into 2023.”
Why did the GOP refuse to increase the debt limit?
Republicans and Democrats alike voted to lift the debt ceiling on three occasions while Donald Trump was president.
Why is there a debt ceiling?
This made it significantly harder to finance the war since Congress needed to approve each bond separately.
The creation of the debt limit was its response to this burden.
What’s the difference betweenraisingandsuspendingthe debt ceiling?
“Raising it would simply increase the amount of debt the country can take on,” Adair said.
“Suspending it would instead allow for limitless borrowing until a date Congress specifies.”
What happens if Congress doesn’t raise or suspend the debt ceiling in the future?
We don’t know exactly what will happen.
This would be an unprecedented event.
But the impact could be cataclysmic for the US economy and cause ripples across the world.
And that is what many US officials are warning of.
The consequences would “produce widespread economic catastrophe,” Yellenwrote in The Wall Street Journal.
The US government would be forced to finance its debt obligations with whatever cash it has on hand.
After it burns through that, the government would likely default on its remaining debts.
Could the US mint a trillion-dollar coin made of platinum to avoid the default?
But this is a completely theoretical idea, and not something worked out by experts.
How would defaulting affect the US economy?
The impact would be acute and widespread.
Millions of Americans wouldn’t receive Social Security or Medicare benefits.
How could it affect you?
As with so many catastrophes, the economically disadvantaged would be disproportionately affected.
Food assistance benefits would stop nationwide, monthlychild tax creditswould be delayed and compensation forveteransand pension payments would lapse.
