Yellen Says Debt-Limit Deal Will Keep Government Funded Through Dec. 3

“It’s essential that Congress act to increase or droop the debt limit in a method that offers longer-term certainty that the federal authorities will fulfill all its obligations,” she wrote.

On Thursday, President Biden signed a bill elevating the debt ceiling by $480 billion that the Residence and Senate had approved along party lines.

The bill was primarily based totally on a proposal by Senate Minority Chief Mitch McConnell (R., Ky.) to briefly allow the federal authorities to take care of borrowing money. Whereas the Senate permitted the bill alongside celebration traces, 11 Republicans joined all 50 Democrats to interrupt a filibuster and allow the Senate to ponder an up-or-down vote.

By laws, Congress has to set a borrowing limit for the federal authorities. Elevating the debt ceiling doesn’t authorize new spending nevertheless considerably permits the federal authorities to fulfill current obligations, resembling sending Social Security checks and making funds on the debt.

If Congress doesn’t enhance the debt ceiling, the federal authorities should droop funds to beneficiaries or delay curiosity funds, which could characterize a authorities default.

Voting to spice up the debt limit has flip right into a political battle recently as Democrats and Republicans argue over how lots the federal authorities must be spending. Republicans have sought to utilize debt-ceiling votes to push for cuts to authorities packages.

In present weeks, Republicans have said Democrats ought to make use of a course of known as reconciliation which will allow them to spice up the debt limit with none GOP votes. Democrats have objected, saying paying the nation’s funds must be a shared responsibility.

Write to David Harrison at david.harrison@wsj.com