US Senators Agree To Raise Debt Ceiling To Avoid Economic Catastrophe

Debt ceiling
Sen. Mitch McConnell
  • The agreement comes less than two weeks before 18 October, the day the US Treasury Secretary Janet Yellen warned was the deadline to prevent the first ever US default

United States Senators have agreed to extend the country’s debt ceiling, less than two weeks before it was due to be reached.

A debt ceiling is a limit on how much the government can borrow.

There were fears that the US would default on its national debt, with catastrophic financial implications.

But Senate Majority leader Chuck Schumer said Congress had reached a deal to extend the debt ceiling until early December.

Republican Senate Minority leader Mitch McConnell said: “Republican and Democratic members and staff negotiated through the night in good faith.”

Read also: United States Will Be Broke By October 18 – Govt Official Raises Alarm

The temporary debt compromise will need to be passed by both chambers of Congress.

The agreement comes less than two weeks before 18 October, the day the US Treasury Secretary Janet Yellen warned was the deadline to prevent the first ever US default.

The US debt currently stands at around $28tn (£21tn).

Congress will still have to address this issue near the new December deadline to avert a default.

Failure by the US to repay its bill would severely hurt the country’s credit rating, plunge the global financial system into turmoil, and possibly lead to a self-inflicted recession.

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