Congress Showed Mercy, For Now...
23:53 GMT 07.10.2021 (Updated: 23:54 GMT 07.10.2021)
© Sputnik / Ted RallFaced with possible default on the national debt that could tank the economy, Republicans agreed to stand aside temporarily in order to allow Democrats to raise the debt ceiling to accommodate Trump-era spending.
© Sputnik / Ted Rall
On Thursday, House Majority Leader Chuck Schumer revealed that an emergency agreement had been struck to raise the debt ceiling until early December in order to avoid a full-scale financial crisis.
As Republicans finally agreed on a short-term debt ceiling increase, the raging tensions between the GOP and Dems calmed a little – for the time being at least.
The vote allows the Democrats to pass an emergency debt limit extension without the reconciliation negotiations that the GOP had demanded, or the need to repeal the filibuster rule, allowing the Dems to raise the debt limit without opposition support.
Before the deal was struck, Treasury Secretary Janet Yellen had repeatedly warned Capitol Hill that unless Congress acted to increase or suspend the debt ceiling, the Treasury would likely exhaust its "extraordinary measures" capabilities to avoid default by 18 October. Yellen said that defaulting on America's debts would have "catastrophic" implications, including a severe global economic crisis, soaring interest rates, and the possibility of the dollar's de facto reserve currency status being revoked.
The development means that Americans can breathe a touch easier – for now – because the state will continue operating as usual for another couple of months, but it's likely that the two main political parties will resume their back and forth as the deadline edges closer. The world will be watching on nervously...