US House of Representatives approves an increase in debt-ceiling bill - Including provisions directing Biden administration to cut spending

Washington – The US House of Representatives of the US Congress has approved the bill that increases the debt ceiling taken by the government. A bill that would increase the debt ceiling by $1.5 trillion was approved by a narrow margin of 217 to 215 in Wednesday’s session. However, the sources say that the bill passed in the House was unlikely to get approval from the Senate or President Biden. Analysts claim that the Republican Party has succeeded in putting pressure on President Biden by giving the message that they were not against increasing the debt limit.

The US Congress had set a debt ceiling of $31.4 trillion in December 2021. The US Congress had set a debt ceiling on January 19, 2023, which has been exceeded. After that, the Treasury Department has been taking extraordinary measures, and the period could be extended from June to July. However, this may lead to the administration being forced to stop payments like salaries and loan repayments. Considering this background, it has become necessary to approve the bill to increase the debt ceiling and turn it into law by June.

But, a strong conflict has flared up in the US political circle over this at present. Although the Republicans have agreed to increase the limit, it has put conditions on spending cuts. At the same time, President Joe Biden and the Democratic Party have taken a stubborn stance that there will be no cuts on spending. President Biden had stated that if the Republicans present their plan, they will discuss it with them. Against this background, the bill approved on Wednesday becomes important.

The bill approved on Wednesday has been named the ‘Limit, Save, Grow’ bill, which cuts on Biden administration’s spending to a large extent. The Biden administration should lower spending levels to 2022; such a provision has been made in the bill. Nearly $4.5 trillion of the Biden administration’s total spending has been cut. These include plans to reduce student loans, health insurance spending, energy tax breaks and cuts to the IRS.

Moreover, the cuts proposed by the Republicans have been a blow to the ambitious plans of the Biden administration. Therefore, President Biden and the Democratic Party have strongly opposed this bill. But the senior leader of the Republican Party and the Speaker of the House of Representatives, Kevin McCarthy, has taken an aggressive stance that they have done their job, and now it is the President’s responsibility. Therefore, in the coming times, there have been indications that the political conflict over the debt limit will intensify further.

The US Secretary of Treasury Janet Yellen warned at an event held in Washington capital on Tuesday that the country will face dire economic and social consequences if it fails to repay the debt (default). Simultaneously, some economists and analysts pointed to the US Congress’s political conflict and feared facing a financial crisis like in 2011 and 2013.

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