The US Congress has approved an agreement to increase the country’s borrowing limit, days before the largest economy in the world is scheduled to default on its debt.
The bill passed the Senate with a vote of 63-36, a day after it was approved by the US House of Representatives.
President Joe Biden has declared that he will sign the bill into law.
His signature on the measure will prevent a catastrophic default on the United States’ $31.4 trillion (£25 trillion) debt.
On Monday, 5 June, the nation will likely exceed its present debt ceiling, according to projections.
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A default would restrict the government’s ability to borrow additional funds and pay all of its obligations. It would also have the potential to wreak havoc abroad, influencing prices and mortgage rates in other nations.
During Thursday night’s session, 44 Democrats, 17 Republicans, and two independents voted in favor of the bill.
In a 100-seat chamber that the Democrats only tenuously control, sixty votes were needed to pass the measure.
John Barrasso, a member of the Republican leadership in the chamber, was among the thirty-one Republicans who opposed the bill.
Senators Bernie Sanders, John Fetterman, and Elizabeth Warren were among the four Democrats who voted against the bill.
Senators initially proposed eleven amendments to the debt ceiling measure, but all of them were quickly rejected, paving the way for a final vote.
If even one of the amendments had passed, the entire bill would have had to be sent back to the House, leaving little time to assure the measure’s final passage before the United States fiscal cliff.
“America can breathe a sigh of relief, a sigh of relief, because in this process we are avoiding default,” Senate Democratic Majority Leader Chuck Schumer told the chamber.
Senate Republican leader Mitch McConnell told reporters that he would be “proud to support it without delay” in a rare display of bipartisanship.
Wednesday evening, the House approved the agreement by a vote of 314-117. The required simple majority of 165 Democrats and 149 Republicans voted in favor, meeting the requisite threshold.
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With Republicans in control of the House of Representatives and Democrats in control of the Senate and the White House, a compromise proved elusive for weeks until Mr. Biden and House Speaker Kevin McCarthy reached a compromise over the weekend.
The agreement suspends the debt ceiling until January 1, 2025. The debt ceiling is the spending limit established by Congress that determines how much money the government can borrow.
The legislation will result in savings of $1.5 trillion over a decade, according to the independent Congressional Budget Office.
The bill’s contents drew opposition from both right-wing Republicans and left-wing Democrats, but there were more than enough political moderates in both parties to ensure its passage.
In 2011, when the United States came near to exceeding its debt ceiling, Standard & Poor’s downgraded the country’s credit rating, a move that has yet to be reversed.
Prior to the Senate vote, US stock markets closed 0.5% higher, with the Dow gaining 0.3%. The broader S&P 500 index gained 1%, while the tech-heavy Nasdaq gained 1.3%.
