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

Published

2 years ago

June 1, 2023

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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.

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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

Farmer becomes first person to die during Trump’s ICE raids

Published

2 hours ago

July 13, 2025

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Farmer becomes first person to die during Trump's ICE raids

A farmer who fell from a greenhouse roof during an anti-immigrant raid at a licensed cannabis facility in California this week has died of his injuries.

Jaime Alanis, 57, is the first person to die as a result of Donald Trump’s Immigration Compliance and Enforcement (ICE) raids.

His niece, Yesenia Duran, posted on the fundraising site GoFundMe to say her uncle was his family’s only provider and he had been sending his earnings back to his wife and daughter in Mexico.

The United Food Workers said Mr Alanis had worked on the farm for 10 years.

“These violent and cruel federal actions terrorise American communities, disrupt the American food supply chain, threaten lives and separate families,” the union said in a recent statement on X.

The Department of Homeland Security (DHS) said it executed criminal search warrants at Glass House Farms facilities on Thursday.

Mr Alanis called family to say he was hiding and possibly fleeing agents before he fell around 30ft (9m) from the roof and broke his neck, according to information from family, hospital and government sources.

Agents arrested 200 people suspected of being in the country illegally and identified at least 10 immigrant children on the sites, the DHS said in a statement.

Mr Alanis was not among them, the agency said.

“This man was not in and has not been in CBP (Customs and Border Protection) or ICE custody,” DHS assistant secretary for public affairs Tricia McLaughlin said.

“Although he was not being pursued by law enforcement, this individual climbed up to the roof of a greenhouse and fell 30ft. CBP immediately called a medivac to the scene to get him care as quickly as possible.”

Four US citizens were arrested during the incident for allegedly “assaulting or resisting officers”, the DHS said, and authorities were offering a $50,000 reward for information leading to the arrest of a person suspected of firing a gun at federal agents.

In a statement, Glass House, a licensed Cannabis grower, said immigration agents had valid warrants. It said workers were detained and it is helping provide them with legal representation.

“Glass House has never knowingly violated applicable hiring practices and does not and has never employed minors,” it added.

US

Donald Trump threatens to revoke Rosie O’Donnell’s US citizenship

Published

2 hours ago

July 13, 2025

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Donald Trump threatens to revoke Rosie O'Donnell's US citizenship

Donald Trump has said he is considering “taking away” the US citizenship of actress and comedian Rosie O’Donnell, despite a Supreme Court ruling that expressly prohibits a government from doing so.

In a post on Truth Social on Saturday, the US president said: “Because of the fact that Rosie O’Donnell is not in the best interests of our Great Country, I am giving serious consideration to taking away her Citizenship.”

He also labelled O’Donnell, who has moved to Ireland, as a “threat to humanity” and said she should “remain in the wonderful country of Ireland, if they want her”.

O’Donnell responded on Instagram by posting a photograph of Mr Trump with Jeffrey Epstein.

“You are everything that is wrong with America and I’m everything you hate about what’s still right with it,” she wrote in the caption.

“I’m not yours to silence. I never was.”

O’Donnell moved to Ireland with her 12-year-old son in January after Mr Trump had secured a second term.

She has said she’s in the process of obtaining Irish citizenship based on family lineage and that she would only return to the US “when it is safe for all citizens to have equal rights there in America”.

O’Donnell and the US president have criticised each other publicly for years, in an often-bitter back-and-forth that predates Mr Trump’s move into politics.

This is just the latest threat by the president to revoke the citizenship of someone he has disagreed with, most recently his former ally Elon Musk.

But the two situations are different as while Musk was born in South Africa, O’Donnell was born in the US and has a constitutional right to American citizenship.

Amanda Frost, a law professor at the University of Virginia School of Law, said the Supreme Court ruled in a 1967 case that the fourteenth amendment of the constitution prevents the government from taking away citizenship.

“The president has no authority to take away the citizenship of a native-born US citizen,” he added.

“In short, we are nation founded on the principle that the people choose the government; the government cannot choose the people.”

US

Donald Trump announces 30% tariff on imports from EU

Published

19 hours ago

July 12, 2025

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Donald Trump announces 30% tariff on imports from EU

Donald Trump has announced he will impose a 30% tariff on imports from the European Union from 1 August.

The tariffs could make everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the US.

Mr Trump has also imposed a 30% tariff on goods from Mexico, according to a post from his Truth Social account.

Announcing the moves in separate letters on the account, the president said the US trade deficit was a national security threat.

In his letter to the EU, he wrote: “We have had years to discuss our trading relationship with The European Union, and we have concluded we must move away from these long-term, large, and persistent, trade Deficits, engendered by your tariff, and non-Tariff, policies, and trade barriers.

“Our relationship has been, unfortunately, far from reciprocal.”

In his letter to Mexico, Mr Trump said he did not think the country had done enough to stop the US from turning into a “narco-trafficking playground”.

The president of the European Commission, Ursula von der Leyen, said today that the EU could adopt “proportionate countermeasures” if the US proceeds with imposing the 30% tariff.

Ms von der Leyen, who heads the EU’s executive arm, said in a statement that the bloc remained ready “to continue working towards an agreement by Aug 1”.

“Few economies in the world match the European Union’s level of openness and adherence to fair trading practices,” she continued.

“We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”

Ms von der Leyen has also said imposing tariffs on EU exports would “disrupt essential transatlantic supply chains”.

Meanwhile, Dutch Prime Minister Dick Schoof said on the X social media platform that Mr Trump’s announcement was “very concerning and not the way forward”.

He added: “The European Commission can count on our full support. As the EU we must remain united and resolute in pursuing an outcome with the United States that is mutually beneficial.”

Mexico’s economy ministry said a bilateral working group aims to reach an alternative to the 30% US tariffs before they are due to take effect.

The country was informed by the US that it would receive a letter about the tariffs, the ministry’s statement said, adding that Mexico was negotiating.

Trump’s tariff threats and delays

On his so-called “liberation day” in April, Mr Trump unleashed “reciprocal tariffs” on many of America’s trade partners.

The US president said he was targeting countries with which America has a trade imbalance.

However, since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.

The US imposed a 20% tariff on imported goods from the EU in April but it was later paused and the bloc has since been paying a baseline tariff of 10% on goods it exports to the US.

In May, while the US and EU where holding trade negotiations, Mr Trump threated to impose a 50% tariff on the bloc as talks didn’t progress as he would have liked.

However, he later announced he was delaying the imposition of that tariff while negotiations over a trade deal took place.

As of earlier this week, the EU’s executive commission, which handles trade issues for the bloc’s 27-member nations, said its leaders were still hoping to strike a trade deal with the Trump administration.

Without one, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes.