Biden signs Bill raising US debt limit, averting default

The US$480 billion increase in the borrowing limit signed by President Joe Biden is expected to be exhausted by Dec 3.
The US$480 billion increase in the borrowing limit signed by President Joe Biden is expected to be exhausted by Dec 3.PHOTO: REUTERS

WASHINGTON (REUTERS) - US President Joe Biden on Thursday (Oct 14) signed legislation temporarily raising the government's borrowing limit to US$28.9 trillion (S$38.97 trillion), pushing off the deadline for debt default only until December.

Without the increase in the debt ceiling, the US Treasury had estimated it would run out of money to pay the nation's bills on Oct 18.

The US$480 billion increase in the borrowing limit signed by Mr Biden is expected to be exhausted by Dec 3.

Following weeks of partisan fighting, the Senate approved the short-term fix last week and the House of Representatives passed it on Tuesday.

Senate Republican leader Mitch McConnell wrote in a letter to Mr Biden after the Senate vote that he would not help Democrats again in raising the debt limit.

Mr McConnell wants Democrats to use a procedural move known as reconciliation, which would not require Republican votes, to raise the borrowing authority. Democrats have rejected that as an option for lifting the cap.

Republicans say raising the debt limit is Democrats’ problem because of Mr Biden’s proposed US$3.5 trillion spending plan to invest in expanded social services and address climate change. 

Democrats note that they voted to raise the debt ceiling during Republican Donald Trump’s administration even though they opposed deep tax cuts that added to the debt.