An impending insolvency of the US government has been averted. After the House of Representatives, the Senate in Washington also approved a bill late on Thursday evening (local time), with which the national debt ceiling in the USA will be suspended for the time being. Without the move, the government would have run out of money in a matter of days.
With the final vote in Congress, a long political nail-biter, which had triggered great concerns about an economic crisis in the USA and beyond, ended. To the very end, President Joe Biden’s Democrats had fought bitterly with the Republicans to find a compromise.
A default by the world’s largest economy could have triggered a global financial crisis and economic downturn. The dispute over the debt ceiling had therefore also caused unrest on the stock exchanges.
63 out of 100 senators voted in favor of the bill, which would suspend the debt ceiling until 2025 while curbing government spending over the next two years. The necessary majority in the Congress Chamber was thus achieved. This ensures that the government does not become insolvent in a few days.
US Treasury Secretary Janet Yellen recently warned that this dramatic event could occur on Monday. The solution therefore only came about shortly before the deadline. The US House of Representatives passed the bill on Wednesday evening. After the final vote in the Senate, President Biden now has to sign the law in order to put it into effect. However, this is considered a mere formality.