November 30, 2022
Singers of an Orthodox church sing on the eve of the Mestalian Ethiopian Orthodox holiday commemorating the discovery of the true cross of Christ by the Roman Empress Helena in the 4th century in Addis Ababa, Ethiopia.  SOTERAS / AFP

The U.S. Senate is blocking the finance bill and the debt ceiling, and the Biden government could go without funding

WASHINGTON – Joe Biden’s government is pushing for a drastic but expected Senate defeat in a bill to raise the financing and credit ceiling for federal services by November 2022. Now, both party leaders need to resolve this issue. An alternative to not paralyzing the government and avoiding a possible and unprecedented U.S. default. Voting began a week later, which is considered crucial to Biden’s future plans.

The motion needed 60 votes to pass, with Democrats relying on the support of at least 10 Republicans, which did not happen – with 50 votes against and 48 votes in favor.

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The war of Congress, which does not control the Democrats and has a simple majority in the Senate, had its first chapter last week, with the government approving a bill guaranteeing government funding by December 3 and raising the debt ceiling until next December.

Since the plan was passed, Republican minorities in the Senate have announced that they will vote on both issues separately – arguing that while the opposition is in favor of extending funding to avoid a federal shutdown, Democrats agree to suspend themselves. The credit limit is an issue that could have a negative impact on next year’s legislative elections.

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Democrats, on the other hand, believe that the measures – the suspension of additional finance and credit limits – require the support of both parties, and that the option of submitting them to the same bill is seen as a form of pressure, but as expected, initially, it did not work.

Prior to the failure, government representatives were already working on “Plan B” with a specific plan to avoid suspending government activities until next Thursday, the end of the current fiscal year.

Budget tools

This additional funding is a continuous practice and does not usually face opposition from parties, but disagreements in the past have led to a partial suspension of federal services, with leaders signaling that they now want to avoid it.

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If “Plan B” is passed, the problem will be solved very immediately, but there will be a question about the credit limit and the risks associated with it. In 2019, Congress approved a two-year suspension of the application for the limit, and the deadline expired July 31.

This ceiling is not related to the amount of total U.S. debt, but rather the amount the government borrows to meet its obligations – today, the limit is $ 28 trillion, and technically it has already passed that day. August 1, a reflection of measures taken to reduce the impact of the epidemic.

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Since then, the Treasury has been taking exceptional measures to guarantee funding, but there is an expiration date for the measures. In a letter to Congress earlier this month, Treasury Secretary Janet Yellen announced in mid-October that she would not be able to raise money to pay off government debt, such as interest and social benefits. As never before in the recent history of the country.

In the past, both Democrats and Republicans have waged congressional wars to raise or lower the debt ceiling. For example, in 2011, under Barack Obama’s administration, the conflict was so intense that rating agency Standard & Poor’s estimated a portion of the U.S. Treasury debt.

Decisive week

The stalemate over the financing and debt ceiling, which is considered important for the approval of important projects protected by the White House, opens a week. With a value of nearly $ 5 trillion.

Starting with the final vote on the House of Infrastructure project, estimated at $ 1.2 trillion, it has already been approved by the Senate and is due to go to a public meeting on Thursday, House Speaker Nancy Pelosi said. A package to expand social investment and activities for the climate, a project estimated at US $ 3.5 billion, on the other hand, Budget resolution approved by the Senate, Is still discussed in the room.

Both plans are under pressure not only among Republicans but also Democrats – who are subject to debate – among progressives to bring more commitment to the plan and to vote ahead on the infrastructure plan, but centralists are questioning the overall value of the package. To try to level the playing field, the party began a series of meetings on Monday, with Pelosi chairing the first meeting.