by HALEY MILLAN Editor-in-chief
The two-week government shutdown ended after Obama signed a short-term bill, raising the debt ceiling. The temporary bill will last through the start of 2014.
The bill passed the Senate 81-18, with a majority of Democrats and Republicans. It did not go as smoothly in the House of Representatives, where the bill was passed 285-144, with a majority of Democrats and a minority of Republicans.
If there was no decision made on capping the debt ceiling and the government shutdown continued, the government would not have had enough money to pay its bills, and it would lose the authority to borrow money. If the Treasury had defaulted, it would have been the first time in US history.
The debt ceiling will be lifted until February 7 of 2014, extending the US borrowing authority. The debt ceiling determines the maximum amount of money that the US can borrow. Without the bill being passed, the US economy would have been close to a debt default that could have threatened global financial calamity.
Because the bill is short-term, it is possible that there may be another government battle in the upcoming year. This bill kept Republicans and Democrats divided, as they were not able to reconcile or compromise with each other. In case there is another battle in January after the bill ends, the Treasury Department would have ways to temporarily extend its borrowing capacity past February 7.
There was a great race against time to get the bill passed. Government officials stated that they would have had roughly 30 billion dollars to pay important obligations for a few days after October 17, the day of the bill’s deadline.
Allies and creditors of the US, including China, were worried about the political dysfunction that was taking place. The country’s reputation of being a stable financial center was on the line.
“I am happy that our government finally agreed on signing the bill- even if it’s only a temporary one. It’s better than nothing, and hopefully they will move forward and focus on other important parts of the government,” said senior Colleen Gernt.
Part of the deal includes an agreement to appoint members to a bipartisan group to negotiate future spending levels. This group would work out the differences between the two political parties, hopefully coming up with a consensus by early December, in which case the government would avoid a possibility of another battle once the bill times out in the beginning of next year.
Senior Lisa Sowinski said, “I don’t understand why our government can never agree on anything. This is an issue that would not only affects the citizens of the United States, but also the economy of countries all around the world. I do not blame China for being concerned, they have a right to be, especially because we owe them so much money.”
Do you believe this new debt ceiling will positively or negatively affect our economy? Will our government go into another lockout in this upcoming January?