House Turns Down Bill to Increase Debt Limit
A measure that would raise the United States debt limit by $2.4 trillion failed to get the House’s approval. The Democrats said that the vote for the legislation was rigged so that it would be defeated. The Republicans announced last week that the vote would demonstrate that they wouldn’t support any extension of the $14.3 trillion debt limit unless President Barack Obama curbs government spending.
The vote on the increase of the debt limit was 97 in favor, all Democrats, and 318 against, 82 Democrats and 236 Republicans. The measure failed to get the required two-thirds vote so that it could be approved.
The vote doesn’t help boost the confidence of bond traders in the United States. The bond market yields in the country are lower compared to the yields ten years ago when the government enjoys a budget surplus. This is the scenario even though the amount of marketable debt has increased. The yield on the benchmark 10 year Treasury note was tagged at 3.06 percent. This is below the average yield of 5.48 percent from 1998 to 2001.
The White House still believes that Congress will increase the debt ceiling in due time. House Speaker John Boehner said that an increase without major spending cuts will just hurt the economy and add to the debt problem.