On October 12, lawmakers in the House pushed through a bill that ensures that the U.S. Treasury can continue to meet its financial obligations for the next couple of months. The bill raising the nation’s debt ceiling cleared the Senate last week and now only needs the President’s signature. By passing the measure, the Treasury, which would have otherwise exhausted methods for keeping the nation’s financial obligations current, avoids potential disaster.
However, the bill only provides a temporary solution. Once signed into law, the provision will increase the debt limit by $480 billion; extending the Treasury’s ability to keep the country’s finances in order. Congress will have until December to pass another bill either raising the ceiling again, or suspending the debt limit all together. The consequences of a default on US debt obligations could be dire, sending global financial markets into uncertainty and inviting an economic downturn.