US Congress approves deal to lift country's borrowing limit - days before economy is due to default on its debt

2 June 2023, 05:34

Joe Biden will now sign off on the deal
Joe Biden will now sign off on the deal. Picture: Getty
Kieran Kelly

By Kieran Kelly

The US Congress has approved a deal to raise the country's debt ceiling - days before its economy was due to default on its debts.

The deal was voted on by the Senate after the House of Representatives voted in favour of the bill, which Joe Biden will sign before Monday's deadline.

Senate Majority Leader Chuck Schumer said ahead of voting that the Bill's passage means "America can breathe a sigh of relief".

Afterward he said: "We've saved the country from the scourge that is default."

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President Biden has urged the Senate to pass the deal quickly
President Biden has urged the Senate to pass the deal quickly. Picture: Getty

Mr Biden said in a statement following passage that senators from both parties "demonstrated once more that America is a nation that pays its bills and meets its obligations - and always will be".

He said he would sign the Bill into law as soon as possible.

"No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people," the president said.

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Mr Biden had sent top White House officials to the Capitol to shore up backing ahead of the crunch vote in the House.

Meanwhile, Mr McCarthy worked to sell sceptical fellow Republicans, even fending off challenges to his leadership, in the rush to avert a potentially disastrous US default.

Both were counting on support from the political centre, a rarity in divided Washington, testing the leadership of the Democratic president and the Republican speaker.

Overall, the 99-page Bill restricts spending for the next two years, suspends the debt ceiling into January 2025 and changes some policies, including imposing new work requirements for older Americans receiving food aid.

Raising the nation's debt limit, now 31 trillion dollars, ensures Treasury can borrow to pay already incurred US debts.