The debt ceiling crisis is over now that President Biden signed the funding legislation for FY2022. This has a lot to do with more than just debt ceiling though. Now that the funding legislation has passed, there won’t be a government shutdown – it’s averted.
The debt ceiling definition is the overall allowed debt the federal government can occur and has been a major focus in US politics and has been one of the main causes of government shutdowns. The debt ceiling debates lead to a government shutdown in 1995, 2011, 2013, and almost this year in 2021.
Due to COVID-19, both Democrats and Republicans knew that a government shutdown would do more harm than good if the debt ceiling were to go up.
Even if the government closed for a single day, the outcome wouldn’t be feasible and would hurt the local economies across the country. Adding up to the fact that 2.1 million individuals are working for the federal government and they wouldn’t get paid as furloughs happen left and right during a shutdown, it wouldn’t help them and those that depend on them.
Solution for the debt ceiling
The debt ceiling proved itself to be a problematic topic that can cause government closing as it’s a very debatable topic where one side offers an increase, and almost always the other side opposes. The history confirmed this as there have been multiple accounts on debt ceiling arguments leading to the government failing to fund itself.
To prevent further government closings, the Biden administration is set to work on a plan that will bring drastic changes to the debt ceiling to ensure it no longer leads to disagreements, thus, government closing. As soon as the details of the plan come out, we’ll keep you updated.