Congress Agrees to Extend US Debt Ceiling Until December

Pat Stevens/

Democrats and Republicans lawmakers have reached an agreement to extend the US debt ceiling through “early December”, providing a short-term relief to investors and executives who had worried about the possibility of a US government default as soon as this month, Financial Times reports.

Their fear was fueled in part by the warning by US Treasury Secretary, Janet Yellen, that the government risked running out of money by October 18 if no deal was reached.

“We have reached an agreement to extend the debt ceiling through early December, and it is our hope that we can get this done as soon as today,” Chuck Schumer, the Senate’s Democratic leader, told lawmakers today.

The deal came a day after Mitch McConnell, the Republican Senate minority leader, said his party would back a short-term extension to the nation’s borrowing limit.

Republicans have for months rejected Democrats’ appeals for them to sign on to raising the debt ceiling, seeking to tie the country’s existing debt to the Biden administration’s ambitious spending plans.

Earlier yesterday, US president Joe Biden had put pressure on corporate leaders to help him make the case for why Congress needed to act to raise the debt ceiling and avoid default.

While today’s breakthrough came as a relief to investors, the stop-gap measure sets up another possible showdown in the run-up to Christmas. It also follows a separate short-term agreement to fund the federal government until December 3.

If Congress does not reach a deal to continue funding the government by that date, lawmakers will once again risk a government shutdown, which would leave hundreds of thousands of federal employees out of work.

0