House of Representatives approves $1.5 trillion increase in US debt ceiling

The Republican majority in the US House of Representatives passed a bill to raise the country’s national debt ceiling by $1.5 trillion to $32.9 trillion (or until March 31, 2024, whichever comes first). The law is strongly opposed by the Democratic-controlled Senate and President Joe Biden, writes Reuters.

In addition to raising the public debt ceiling, the bill also includes measures to reduce public spending to the level of 2022 and limit their further growth at the level of 1% per year, the abolition of certain tax incentives for renewable energy sources, tightening requirements for receiving medical benefits, etc.

Senate Majority Leader Chuck Schumer has already called the bill “dead on arrival,” saying it only brings the country closer to default.

“President Biden will never force the middle class and working families to bear the brunt of tax cuts for the richest, as this bill does. The president has made it clear that this bill has no chance of becoming law,” Biden spokeswoman Karine Jean-Pierre said.

In December 2021, US President Joe Biden approved an increase in the US national debt limit by $2.5 trillion to $31.4 trillion. The indicator crossed the $30 trillion mark by the beginning of February 2022. Then the NYT wrote that the increase in public debt was due to the consequences of the pandemic. The White House has borrowed $5 trillion in unemployment benefits, small business bailouts, and stimulus payments. In January 2023, the established ceiling was reached again.

In April, the International Monetary Fund (IMF) informedthat global public debt continues to increase faster than predicted before the coronavirus pandemic. Public debt, which soared to nearly 100% of GDP in 2020, fell sharply by 2022, but has picked up again this year, according to IMF finance director Victor Gaspard. By 2028, this figure may reach 99.6% of GDP. The increase in the ratio of public debt to GDP will be mainly due to the state of affairs in the economies of the United States and China, he stressed.