Debt Ceiling Increase 💰

Debt Ceiling Increase

President Joe Biden signed into law a $2.5 trillion increase to the debt ceiling on Thursday, averting economic disaster after running up against a dangerous deadline.

The country inched close to economic peril. Biden signed the borrowing limit hike a day after the date that the Treasury Department estimated it would run out of tools to keep paying the country’s bills.

Congress sent the legislation, which raises the debt ceiling by $2.5 trillion, to Biden early Wednesday. It is expected to allow the government to cover its obligations into 2023.

Biden’s final approval comes roughly one day after the House passed the higher limit. The body voted 221 to 209 at about midnight eastern time to approve the increase. Only one Republican joined Democrats in backing the measure. The Senate passed the measure earlier Tuesday along party lines.

The votes occurred with little time to spare before a potential default, which would be catastrophic for the national economy. Treasury Secretary Janet Yellen warned failure to increase the borrowing limit could lead to a recession and job losses around the country.

Congress has been struggling for months over how to address the debt limit. In October, following weeks of partisan deadlock over the issue, lawmakers passed a short-term debt limit extension into December after Democrats and Republicans reached a deal to avert economic disaster.

Nevertheless, the passage of the bill is good news for Biden, who now has one less pressing legislative issue to address before the Christmas holiday.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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