Agreement in the United States on the emergency budget, financial concerns are far from over

Agreement in the United States on the emergency budget, financial concerns are far from over

The US House of Representatives and the Senate approved the emergency budget. This averted an imminent partial shutdown of the federal government at the last minute. The emergency budget is valid until December 3.

Parts of the US government will shut down if the budget is not agreed in time. The deal will allow hundreds of thousands of civil servants to be paid and keep national parks and federal museums open.

In addition, more than $28 billion will be made available for emergency aid after natural disasters, such as Cyclone Ida, and about $6 billion will be made available to help Afghan refugees. President Biden has now signed the agreement.

The problems are not over yet

In the Senate, there were objections mainly from Republicans, because the proposal also included a clause in which the alleged debt ceiling would be raised. This is the maximum amount that the US government can borrow.

Republicans say Democrats should cut spending before raising the debt ceiling ($28.4 trillion).

In the end, the emergency budget and the debt ceiling were separated, but the problems were not over yet. Treasury Yellen said this week that the US will reach that debt ceiling on October 18. It is expected that the federal government will not be able to pay its bills after that. Republicans and Democrats must now reach agreement on raising that ceiling.

Yellen said he feared disaster if the government stopped paying its bills. She said confidence in the country’s creditworthiness would be damaged, leading to a financial crisis or recession.

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