Wednesday, June 1, 2011

US House rejects higher debt ceiling

US House of Representatives

Source: Press TV

The Republican-controlled US House of Representatives has turned down a bill intended to raise the country's $14.3 trillion borrowing limit.

All Republicans flatly rejected the measure that would raise the US debt ceiling by $2.4 trillion, a move that Democrats described as political posturing, according to a UPI report.

US lawmakers voted 318-97 to defeat the measure, in yet another sign of growing division between Republicans and Democrats. All Republicans were opposed to the increase, as were most Democrats.

Following the voting, House Speaker John Boehner said that hiking the debt limit without implementing major spending cuts would prove detrimental to the US economy. “Today the House stood with the American people and said very clearly that this course of action is unacceptable,” he said.

However, last week, the Democratic-controlled Senate rejected the Republican budget proposal, which considered serious spending cuts and a major change in the country's healthcare program for the elderly.

The recent rejections of legislative proposals comes two months ahead of the crucial August 2 deadline for raising the debt ceiling, despite efforts by US Vice President Joe Biden to fill the gap by holding a series of meetings since early May.

Republicans have said they are ready to make concessions on their plans to cut healthcare costs to help reduce trillions of dollars from the US budget deficit. They previously offered cuts in benefits for the elderly as well as the Medicare and Medicaid healthcare funds. Medicare and Medicaid represent nearly a quarter of all US federal spending.

Democrats, however, have opposed Republican plans despite claiming that they too want to curb the budget deficit. They suggest that deficit reduction should be accomplished by raising taxes on the wealthy.

Experts say that failure to increase the debt limit could be devastating for the US and other economies around the world.

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