One day after passing the US House of Representatives, the bipartisan resolution was swiftly passed in the Senate by a vote of 63-36. According to president Joe Biden, the measure will become law.
With his signature on the bill, the US will avoid a disastrous default on its $31.4 trillion (£25 trillion) in debt. On Monday 5 June 2023, the nation is anticipated to exceed its current debt cap.
In the event of a default, the government wouldn’t be able to borrow more money or cover all of its obligations. Additionally, it might perhaps cause turmoil abroad by impacting pricing and mortgage rates in other nations.
The law was approved during the Thursday night session with the support of two independents, 44 Democrats, and 17 Republicans. In a 100-seat chamber that Democrats barely control, the bill needed 60 votes to pass.
Thirty-one Republicans opposed it, including John Barrasso, a member of the party’s in-house leadership. Senators John Fetterman and Elizabeth Warren, both Democrats, and independent Bernie Sanders also abstained.
Eleven modifications to the debt ceiling bill were initially presented by senators, but they were all swiftly rejected, clearing the path for a final vote. The entire bill would have had to be sent back to the House if even one of the revisions had been approved, giving lawmakers little time to assure ultimate passage of the measure before the US went over the fiscal cliff.
Democratic Senate Majority Leader Chuck Schumer told the Senate, “America can breathe a sigh of relief, a sigh of relief because in this process we are avoiding default.”
Republican Senate leader Mitch McConnell told reporters he would be “proud to support it without delay” in a rare display of bipartisanship.
By a vote of 314-117, the agreement was easily approved by the House of Representatives on Wednesday night. The necessary simple majority of 149 Republicans and about 165 Democrats voted in favor of it.
A deal had been difficult to reach for weeks due to Republican leadership of the House of Representatives and Democratic control of the Senate and White House; nevertheless, Mr. Biden and House Speaker Kevin McCarthy finally reached an agreement last weekend.
Until 1 January 2025, the agreement suspends the debt ceiling, the Congressional spending cap that controls how much money the government can borrow. The independent Congressional Budget Office predicted on Tuesday that the law will save $1.5 trillion over the next 10 years.
Right-wing Republicans and left-wing Democrats both objected to the bill’s provisions, but there were more than enough political centrists in both parties to push it through.
When the United States last came dangerously close to exceeding it’s debt ceiling in 2011, Standard & Poor’s cut the nation’s rating, a decision that has not been overturned. US stock markets rose ahead of the Senate vote, with the Dow closing 0.5% higher. The more inclusive S&P 500 index increased by 1%, and the heavily tech-heavy Nasdaq closed the day up 1.3%.