Earlier in the week, Treasury Secretary Janet Yellen issued a warning to Congress that the debt ceiling urgently needs to be dealt with and that failing to act could be devastating.
However, on Thursday, President Joe Biden signed the 11th-hour funding bill from Congress. This bill will give the government access to enough funding for the weekend and will prevent a nationwide government shutdown in the US.
Janet Yellen also previously called for action to address the debt ceiling, as this could be a financial disaster for the US economy.
In a letter, she called for the debt limit to be raised or suspended by 18th October; otherwise, the government may not be able to spend money or function properly.
This follows a huge increase in spending over the last year. According to the latest figures, the government’s gross daily cash flow exceeded $300 billion in the last year, compared with an average of just under $50 billion per day.
Relief spending has been extended
With the government funding due to expire at midnight on Saturday, this extension was a close call. But, the Democrats, who currently control both the House and the Senate, have kept the government open by signing the bill.
The government has also confirmed that COVID-19 and disaster relief spending will continue through an amendment by Senator Patrick Leahy.
H.R. 5305, the “Extending Government Funding and Delivering Emergency Assistance Act,” not only provides fiscal year 2022 appropriations to federal agencies through December 3; it also allows for the continuation and appropriation of certain projects such as disaster relief.
The relief policies renew existing support, including $28.6 billion to cover the damage caused by natural disasters like hurricanes. It also provides support to America’s Afghan partners.
When announcing the bill, Biden said, “It meets critical and urgent needs of the nation, including disaster relief for both red and blue states hit hard by Hurricane Ida and other devastating natural disasters, and funding to help us resettle Afghan allies in the United States following the end of the 20-year war in Afghanistan.
It will also keep up our fight against COVID-19 and—on this International Recovery Day—it will continue our battle against the opioid crisis.”