US Averts First-Ever Default As Congress Passes Debt Deal
WASHINGTON: US senators voted to suspend the federal debt limit Thursday, capping weeks of fraught negotiations to eliminate the threat of a disastrous credit default just four days ahead of the deadline set by the Treasury.
Economists had warned the country could run out of money to pay its bills by Monday -- leaving almost no room for delays in enacting the Fiscal Responsibility Act, which extends the government's borrowing authority through 2024 while trimming federal spending.
Hammered out between Democratic President Joe Biden and the Republicans, the bipartisan measure passed the Senate with a comfortable majority of 63 votes to 36 a day after it had sailed through the House of Representatives.
"America can breathe a sigh of relief because in this process we are avoiding default. From the start, avoiding default has been our North Star," Democratic Senate Majority Leader Chuck Schumer said.
"The consequences of defaulting would be catastrophic... But, for all the ups and downs and twists and turns it took to get here, it is so good for this country that both parties have come together at last to avoid default."
The bill -- which now heads to Biden's desk to be signed into law -- ended a day of intense back-and-forth between party leaders and rank-and-file members who had threatened the bill's quick passage with last-minute gripes about the detail.
Democratic leaders had spent months underlining the havoc that a first default in history would have wrought, including the loss of millions of jobs and $15 trillion in household wealth, as well as increased costs for mortgages and other borrowing. 'Behind the eight ball' The late evening drama came after a series of failed ballots on amendments sought mainly by Republicans who were threatening at one point to hold up the process, dragging it deep into the weekend.
Senators elected to offer 11 tweaks to the 99-page text, many objecting to funding levels for their pet projects -- from border control and Chinese trade to taxation and the environment -- and each requiring a vote.