The US House of Representatives voted Wednesday to raise the federal debt limit, just five days ahead of the deadline set by the Treasury.
The debt ceiling agreement negotiated between President Joe Biden and House Speaker Kevin McCarthy, putting Congress on track to approve additional borrowing just days before the government is anticipated to run out of money, Fox News reported.
Majorities in both parties supported the agreement, which also satisfies the GOP demand to reduce nondefense discretionary spending over the next two years, and the package passed by a vote of 314 to 117. Democrats supported the bill 165-46, while Republicans supported it by a vote of 149-71. The final agreement reached over the weekend suspends the debt ceiling without a limitation until January 1, 2025.
After the vote, Biden said in a statement: "Tonight, the House took a critical step forward to prevent a first-ever default and protect our country's hard-earned and historic economic recovery.
"The only path forward is a bipartisan compromise."
Calling the bill "objectionable," former House speaker Nancy Pelosi said, "It will avert unprecedented default, which would bring devastation to America's families."
Treasury Secretary Janet Yellen has cautioned that if Congress does not increase or suspend the debt ceiling by Monday, June 5, the US government will be unable to cover its ongoing obligations.
In the United States, a default could cause financial markets to freeze up and spark an international financial crisis. Analysts say millions of jobs would vanish, borrowing and unemployment rates would jump, and a stock-market plunge could erase trillions of dollars in household wealth. It would all but shatter the $24 trillion market for Treasury debt.
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