The U.S. avoided a devastating debt default as the Senate passed legislation to allow the government to borrow money to pay its bills — a major win for President Barack Obama after years of fiscal battles with Republicans.
The relatively smooth passage Wednesday comes as most members of Congress face elections in November. Republicans have been less confrontational after a 16-day partial government shutdown last year sent their poll numbers sliding and chastened the party’s conservative tea party faction.
A debt default could have shaken financial markets and spiked interest rates.
The quick action in the Senate on the debt contrasts with the lengthy showdowns last year and in 2012, when Republicans tried to use the critically necessary measure as leverage to win concessions from Obama.
Obama has been unwilling to negotiate over the debt limit since his re-election in 2012, and Wednesday’s legislation is the third consecutive debt measure passed without White House concessions.
via Mainichi
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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