The US Senate passed a bill to raise the national debt ceiling

Senate Majority Leader Chuck Schumer walks towards the Senate chambers at the US Capitol Building. Credit: Getty Images

The U.S. Senate on Thursday passed a bipartisan bill, backed by President Joe Biden, that raises the $31.4 trillion national debt ceiling, preventing what could have been a historic first-ever default.

The Treasury Department warned it could not pay all their bills on June 5 if Congress does not act by then.

“We avoid default tonight,” Senate Majority Leader Chuck Schumer said Thursday. steered the passage of legislation through his 100-member House.

The Senators sorted out nearly a dozen amendments, rejecting them all, before the final vote and sent the bill to Biden for signature before Monday's deadline. Mr. Biden hailed Thursday's vote as a «big win» for Americans.

«No one gets everything they want in negotiations but make no mistake this bipartisan agreement is a big win for our economy and the American people,» he tweeted, adding that he would sign the bill «as soon as possible» and address the nation on Friday.

0405 Net U.S. Government Debt

Under this act, the statutory limit on federal borrowing will be suspended until January 1, 2025.

Mr. Schumer and his Republican colleague, Minority Leader Mitch McConnell, made good on their promise to do everything possible to expedite the passage of the bill agreed upon by Mr. Biden and Republican House Speaker Kevin McCarthy.

“America can breathe a sigh of relief. «, Schumer said in his speech before the Senate.

Useless delay, unnecessary

Republicans have blocked passing any increase in the debt limit until they lock in some wide-ranging spending cuts in a move they say will begin to address quickly problem. growth of public debt.

Instead, Mr. Biden pushed for higher taxes on the rich and corporations to help deal with mounting debt. Republicans have refused to consider any tax increase.

Both parties have shielded the sprawling Social Security and Medicare pension and medical programs from cuts, and Mr. McCarthy has refused to consider cuts to spending on the military or veterans.

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This has left a somewhat narrow group of domestic «discretionary» programs that bear the brunt of the spending cuts. After all, the Republicans have won about $1.5 trillion in cuts over 10 years that may or may not be fully implemented. Their initial bid was $4.8 trillion in savings over the decade.

Technically, the Treasury reached its borrowing limit in January. Since then, he has been using «emergency measures» to raise the money needed to pay government bills.

Mr. Biden, Treasury Secretary Janet Yellen and Congressional leaders have acknowledged that defaulting on debt due to lack of funds will have serious consequences. These include shock waves in global financial markets that could lead to job losses and a recession in the United States, as well as higher interest rates for families on everything from mortgages to credit card debt.

Mr. Schumer carried this thought through to the end. even as he sent the bill for final passage.

A default, he said, “will almost certainly trigger another recession. This would be a nightmare for our economy and millions of American families. It will take years, years to recover.”

The Republican-controlled House of Representatives passed the bill on Wednesday night by a vote of 314 to 117. Most of those who voted against the bill were Republicans.

“ Time is a luxury that the Senate does not have,” Schumer said Thursday. «Any unnecessary or last-minute delay would be an unnecessary and even dangerous risk.» speedy final approval of the power pipeline in West Virginia.