The House passed legislation Tuesday raising the nation’s debt ceiling for several weeks, allowing the government to keep paying its bills into early December and avoiding the economic chaos that would come if the U.S. defaulted.
By extending the nation’s borrowing limit for a few weeks, lawmakers set up another debt ceiling fight in early December, when they’ll be tasked with finding a long-term solution.
The measure, which lifts the ceiling by $480 billion, heads to President Joe Biden to sign. Biden had warned of “a self-inflicted wound that takes our economy over a cliff” if Congress didn’t raise the debt limit. He had implored lawmakers to extend the debt limit before Oct. 18, when the Treasury Department said it would run out of “extraordinary” funding measures it could take to prevent default.
If the U.S. had defaulted on its debt for the first time, the results could lead to a global recession, Treasury Department officials and experts say. A tanked market would hurt 401(k)s and other investments. For example, a debt ceiling standoff in 2013 cost the economy 1% in GDP.