The US Senate today passed a bill that raises the country’s borrowing limit and averts a possible default on its debt, thus avoiding an economic catastrophe at the eleventh hour.
The Senate voted 74 to 26 in favour of the bill that enables the President, Mr Barack Obama to sign into law an austerity plan to increase the debt ceiling and reduce the deficit by $2.4 trillion.
The bill was passed by the US House of Representatives yesterday after weeks of political wrangling.
The Senate Minority Leader, Mr Mitch McConnell, said the new bill creates an entirely new template for raising the nation’s debt limit.
“One of the most important things about this legislation is the fact that never again will any President, from either party, be allowed to raise the debt ceiling without being held accountable for it by the American people and without having to engage in the kind of debate we’ve just come through,” he argued.
“This kind of discussion isn’t something to dread; it’s something to welcome. And while the President may not have particularly enjoyed this debate, it was a debate that Washington needed to have.”
The US government hit its current debt limit of $14.3 trillion on May 16 and has since been operating through spending and accounting adjustments.