The U.S Debt Ceiling is Raised !

The U.S Debt Ceiling is Raised !

With the rising rate of food, housing, insurance, etc., the Debt Ceiling is taking a toll on millions of people in the US. Many may ask, what is the debt ceiling? The debt ceiling / limit is a restriction on how much the federal government can borrow to pay its bills and allocate funds for future investments. So far the government has borrowed its limit of. The US government usually borrows money from other countries like China and Japan by selling investment bonds to them. Each month at the government spends more than it brings in, it has to borrow.

The sum of all of this borrowing is the federal debt. The government has reached “ceiling” /limit in the amount of 16.4 Trillion dollars. Congress has recently suspended the ceiling/limit allowing the treasury to borrow whatever we the federal government needs to pay off its debt but that extension only lasted until May 19, 2023.

Back on May 1, 2023, Treasury Secretary Janet Yellen informed the public that the U.S government could run out of cash as early of June 1 if the debt ceiling is not raised or suspended in due time. After a few weeks of intensive debate and negotiations between Republicans, Democrats, and senators, the U.S. Senate has passed the Fiscal Responsibility Act!

The Fiscal Responsibility Act is a bill that would suspend the governments debt for up to two years. In a bipartisan vote, 63 people voted for the act and 36 voted against it. If the debt ceiling/limit wasn’t raised, the U.S would’ve suffered immensely causing billions of cut back on food assistance, health insurance, investments, and even unspent Covid funds. Thankfully, The US House of Representatives has voted to agree a deal reached by President Joe Biden and Speaker Kevin McCarthy to raise the amount America can borrow.

If the U.S. Senate did not pass the Fiscal Responsibility Act, the country would have suffered economically and come to a default on debt payment obligations. Republicans and Democrats agreed to come to a compromise deal to raise the debt ceiling only if the federal government cut back on its federal spending and not borrow anymore money now that its limit is now $31.4 Trillion dollars.

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