The majority of US senators voted on Thursday (the first) to pass a law that raises the government’s debt ceiling. The approval is done a few days before the deadline to avoid unprecedented default by the US government.
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The project, as a result of an agreement between Republicans and Democrats, suspends the so-called US federal debt ceiling – currently at US$31.4 trillion.
After approval, Biden made a statement thanking the vote and saying the bipartisan agreement was a huge victory for the US economy. The president said he was “eager” to sign the law as soon as possible.
The debate over approval of the proposal was marked by an arm-wrestling match between Democrats and Republicans and caused a race against time for the government.
The Treasury Department has warned that it will not be able to pay all of its bills after June 5 if Congress does not move to raise the cap.
The United States has a mechanism created in 1917 to limit the amount of debt a government can take on during a fiscal year, which runs from October to September. This year, the $31.4 trillion limit was reached in January.
With the approval of the Senate and the House of Representatives, the debt ceiling is eliminated until at least January 1, 2025, i.e. after the US presidential election in November 2024.
The bill also limits some government spending over the next two years, speeds up the licensing process for some energy projects, recovers unspent funds against the pandemic, and expands work requirements for food aid programs to additional recipients.
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