Crunch deal to raise US debt ceiling passes through House of Representatives

Published

2 years ago

June 1, 2023

admin

A crunch deal to raise the US debt ceiling has been voted through by the House of Representatives.

The agreement – which aims to avert a potentially catastrophic scenario where the US defaults on its national debts – passed through the Republican-majority House by 314 to 117 votes.

The proposal will now move to the Senate. The Senate’s majority leader, Chuck Schumer, has vowed to move quickly to pass the bill.

It needs to be on President Joe Biden’s desk by Monday’s deadline – the point at which the US federal government is expected to run out of money to pay its bills.

“This agreement is good news for the American people and the American economy,” Mr Biden said after the vote.

“I urge the Senate to pass it as quickly as possible so that I can sign it into law.”

What is the debt limit – and why does it matter?

The main aim of the deal is to increase the US debt limit from $31.4trn (£25.3trn) – which it achieves by suspending the borrowing limit until January 2025 rather than setting a new level.

It also averts a situation where the US defaults on its national debts – a scenario that would have huge impacts both for the US and the wider world economy.

US Treasury secretary Janet Yellen previously warned that without a deal to suspend the debt ceiling, the US would not have enough money to meet all of its financial obligations by 5 June.

That would mean civil servant wages, social welfare payments, and health insurance would go unpaid.

Crisis gets kicked down the road – but is a ‘moment of reckoning’ to come?

American politics has a strange ability to create a sort of manufactured jeopardy, which then has the prospect of becoming a self-fulfilling prophecy.

Few really believe that the country’s politicians will actually allow the nation to default for the first time in its history.

But this game of chicken is going to the wire – both sides unwilling to move, even to negotiate, until the last minute to eke out concessions.

And to be clear, it is a game which can go wrong – and if a default did happen, it would be a global crisis.

The vote overnight, for the deal – to raise the debt ceiling – means the crisis is a little closer to being avoided.

Congressmen and women found consensus in a deeply divided house to vote for the deal which had been hammered out by President Biden and his political foe, House speaker Kevin McCarthy, over the past few days. It passed 314 to 117.

But in their pre-vote speeches, it was clear that many, many politicians have deep reservations about the level of unsustainable debt.

Yes, they were relieved that the deal allows bills to be paid, it protects the country’s credit rating, medical care is protected as is social security.

But, “a moment of reckoning is coming”, one Republican warned. Another said the level of debt is “totally unsustainable and irresponsible”.

Some Republicans celebrated concessions they got, which will impose spending caps and place checks and balances on the executive branch of government.

But the consensus was that it wasn’t perfect or even good for anyone. But that’s the price of such divided politics.

The bill now heads to senators. They may want amendments, but are likely to pass it. Crisis is then averted. This game of chicken over. Debt ceiling raised. Can kicked down the road.

If the US no longer pays interest on its bonds – IOUs it issued to raise funds – it would default on debt payments and its credit rating would fall.

A vital way the country raises money – selling bonds – would also be at risk due to the insecurity will markets would charge more to lend to the US.

Economists warn that a prolonged period where the US cannot pay its bills would lead to a nearly 20% drop in stock prices – and an economic contraction of up to 4%.

Bipartisan deal

Wednesday’s vote comes after Mr Biden and leader of the House of Representatives, speaker Kevin McCarthy, reached an agreement over the country’s debt ceiling.

In order to secure the agreement, the Democrats were forced to make concessions to the typically pro-small-state Republicans, including spending cuts and policy concessions.

Click to subscribe to the Sky News Daily wherever you get your podcasts

In a speech before the vote, Mr McCarthy praised the bill’s budget cuts, which he said were needed to curb Washington’s “runaway spending”.

Despite his praise of the deal, it drew opposition from 71 hardline Republicans. That would normally be enough to block partisan legislation, but 165 Democrats backed the measure and pushed it through.

US

Donald Trump sending ‘top of the line’ weapons to support NATO in Ukraine war

Published

17 hours ago

July 15, 2025

admin

Donald Trump sending 'top of the line' weapons to support NATO in Ukraine war

Donald Trump has agreed to send “top of the line weapons” to NATO to support Ukraine – and threatened Russia with “severe” tariffs if it doesn’t agree to end the war.

Speaking with NATO secretary-general Mark Rutte during a meeting at the White House, the US president said: “We’ve made a deal today where we are going to be sending them weapons, and they’re going to be paying for them.

“This is billions of dollars worth of military equipment which is going to be purchased from the United States, going to NATO, and that’s going to be quickly distributed to the battlefield.”

Follow the latest here

Weapons being sent include surface-to-air Patriot missile systems and batteries, which Ukraine has asked for to defend itself from Russian air strikes.

Mr Trump also said he was “very unhappy” with Russia, and threatened “severe tariffs” of “about 100%” if there isn’t a deal to end the war in Ukraine within 50 days.

The White House added that the US would put “secondary sanctions” on countries that buy oil from Russia if an agreement was not reached.

Later on Monday, Ukrainian leader Volodymyr Zelenskyy thanked Mr Trump and said he was “grateful” for the US president’s “readiness to help protect our people’s lives”.

After criticising Vladimir Putin’s “desire to drag it out”, he said he appreciated “preparing a new decision on Patriots for Ukraine” – and added Kyiv is “working on major defence agreements with America”.

It comes after weeks of frustration from Mr Trump over Mr Putin’s refusal to agree to an end to the conflict, with the Russian leader telling the US president he would “not back down” from Moscow’s goals in Ukraine at the start of the month.

During the briefing on Monday, Mr Trump said he had held calls with Mr Putin where he would think “that was a nice phone call”, but then “missiles are launched into Kyiv or some other city, and that happens three or four times”.

“I don’t want to say he’s an assassin, but he’s a tough guy,” he added.

Earlier this year, Mr Trump told Mr Zelenskyy “you’re gambling with World War Three” in a fiery White House meeting, and suggested Ukraine started the war against Russia as he sought to negotiate an end to the conflict.

After Mr Trump’s briefing, Russian senator Konstantin Kosachev said on Telegram: “If this is all that Trump had in mind to say about Ukraine today, then all the steam has gone out.”

Meanwhile, Mr Zelenskyy met with US special envoy Keith Kellogg in Kyiv, where they “discussed the path to peace” by “strengthening Ukraine’s air defence, joint production, and procurement of defence weapons in collaboration with Europe”.

He thanked both the envoy for the visit and Mr Trump “for the important signals of support and the positive decisions for both our countries”.

US

Trump is clearly fed up with Putin – but will his shift in tone force Russia to the negotiating table?

Published

17 hours ago

July 15, 2025

admin

Trump is clearly fed up with Putin - but will his shift in tone force Russia to the negotiating table?

As ever, there is confusion and key questions are left unanswered, but Donald Trump’s announcement on Ukraine and Russia today remains hugely significant.

His shift in tone and policy on Ukraine is stark. And his shift in tone (and perhaps policy) on Russia is huge.

Ever since Mr Trump returned to the White House he has flatly refused to side with Ukraine over the Russian invasion.

He has variously blamed Ukraine for the invasion and blamed Joe Biden for the invasion, but has never been willing to accept that Russia is the aggressor and that Ukraine has a legitimate right to defend itself.

Today, all that changed. In a clear signal that he is fed up with Vladimir Putin and now fully recognises the need to help Ukraine defend itself, he announced the US will dramatically increase weapons supplies to Kyiv.

But, in keeping with his transactional nature and in a reflection of the need to keep his isolationist “America-First” base on side, he has framed this policy shift as a multi-billion dollar “deal” in which America gains financially.

American weapons are to be “sold” to NATO partners in Europe who will then either transfer them to Ukraine or use them to bolster their own stockpiles as they transfer their own existing stocks to Kyiv.

“We’ve made a deal today,” the president said in the Oval Office. “We are going to be sending them weapons, and they are paying for them. We are manufacturing, they are going to be paying for it. Our meeting last month was very successful… these are wealthy nations.”

This appears to be a clever framing of the “deal”. Firstly, America has always benefited financially by supplying weapons to Ukraine because much of the investment has been in American factories, American jobs and American supply chains.

While the details are not entirely clear, the difference now appears to be that the weapons would be bought by the Europeans or by NATO as an alliance.

The Americans are the biggest contributor to NATO, and so if the alliance is buying the weapons, America too will be paying, in part, for the weapons it is selling.

However, if the weapons are being bought by individual NATO members to replenish their own stocks, then it may be the case that the US is not paying.

NATO officials referred all questions on this issue to the White House, which has not yet provided clarity to Sky News.

It is also not yet clear what type of weapons will be made available and whether it will include offensive, as well defensive, munitions.

A key element of the package will likely be Patriot missile batteries, 10 to 15 of which are believed to be currently in Europe.

Under this deal, it is understood that some of them will be added to the six or so batteries believed to be presently in Ukraine. New ones would then be purchased from US manufacturers to backfill European stocks. A similar arrangement may be used for other weapons.

The president also issued the Russian leader with an ultimatum, saying that Putin had 50 days to make a peace deal or else face 100% “secondary tariffs”. It’s thought this refers to a plan to tariff, or sanction, third countries that supply Russia with weapons and buy Russian oil.

This, the Americans hope, will force those countries to apply pressure on Russia.

But the 50-day kicking of the can down the road also gives Russia space to prevaricate. So, a few words of caution: first, the Russians are masters of prevarication. Second, Trump tends to let deadlines slip. And third, we all know Trump can flip-flop on his position repeatedly.

Maybe the most revealing aspect of all this came when a reporter asked Mr Trump: “How far are you willing to go if Putin sends more bombs in the coming days?”

“Don’t ask me questions like that…”

Mr Trump doesn’t really know what to do if Mr Putin continues to take him for a ride.

Mr Biden, before him, supplied Ukraine with the weapons to continue fighting.

If Mr Trump wants to end this, he may need to provide Ukraine with enough weapons to win.

But that would prolong, or even escalate, a war he wants to end now.

There’s the predicament.

US

‘Disgusting’ antisemitic and racist messages posted on Elmo’s X page by hacker

Published

19 hours ago

July 15, 2025

admin

'Disgusting' antisemitic and racist messages posted on Elmo's X page by hacker

An X account for the Sesame Street character Elmo has been targeted by an unknown hacker who posted antisemitic and racist messages.

The profile is followed by more than 650,000 users on the social network – and usually posts upbeat and motivational updates.

Sunday’s messages, which have since been deleted, called for violence against Jews, insulted Donald Trump, and referred to alleged files related to Jeffrey Epstein.

In a statement, Sesame Workshop said the X account has now been secured – and described the posts uploaded to Elmo’s page as “disgusting”.

This is the latest controversy to befall Elon Musk’s platform in recent days.

Last week, X’s AI chatbot Grok also produced content with antisemitic tropes, which were later removed and denounced as “inappropriate”.

Musk purchased the website, formerly known as Twitter, back in 2022 – with extremist content increasing against a backdrop of less moderation.

The Anti-Defamation League, a US organisation that fights antisemitism, said: “It’s appalling that Elmo’s official account, known for spreading kindness, was hacked solely to spread violent antisemitism.”

“Antisemitism on social media fosters the normalisation of anti-Jewish hate online and offline – and contributes to an increasingly threatening environment for Jewish people everywhere.”

Elmo’s account has not posted since the hack.