The Senate approved the bill on Thursday, after approval by the House of Representatives on Wednesday.
The proposal was negotiated last week by Democratic President Joe Biden and Republican House Speaker Kevin McCarthy.
The White House announced the signing — which took place privately inside the White House — in an emailed statement.
There, Biden thanks the leaders of the two major political parties in Congress for their cooperation and partnership.
Few are entirely satisfied with the settlement, but many members believe that compromise is better than the alternative—that the United States finds itself in severe financial turmoil, which will have implications for the entire global economy.
In the House of Representatives, 314 voted in favor of the bill and 117 voted against. Of those who voted against, 71 were Republicans and 46 were Democrats.
In the Senate, the motion passed by numbers 63-36, with Republicans primarily voting against.
Before the signing, Biden addressed the nation from the Oval Office. The president then paid tribute to the House Majority Leader, Republican Kevin McCarthy, with whom he had negotiated a settlement. The president also singled out other congressional leaders to “ensure that legislation passes quickly.”
Act responsibly and put the interests of the country before politics.
Officially, the US hit the debt ceiling – at $31.4 trillion – already in January. But the Finance Ministry has since been able to pay for itself by changing existing resources. However, Finance Minister Janet Yellen warned that at the beginning of June it would no longer be possible to handle payments in this way.
The consequences if the US finds it difficult to pay will be catastrophic and will impose drastic political measures. Most people would expect the United States to do its best to keep up interest payments and repayments – to avoid catastrophe in global financial markets.
Thus, the austerity that would be necessary without new loans would hit retirees and other beneficiaries within the US Social Security system hard and also mean suspended payments to suppliers and ongoing operations — including defense. This scenario would create a deep recession in the world’s largest economy, according to SEB economists.
Sources: Bloomberg, SEB, The Wall Street Journal
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