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Biden signs bill, avoiding US default

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WASHINGTON — President Joe Biden has signed a bill that suspends the US government’s $31.4 trillion debt ceiling, averting what would have been a first-ever default with just two days to spare.

The bipartisan act suspends the public debt limit until Jan 1, 2025, and increases the limit to the actual debt level on Jan 2, 2025.

The global investment bank Goldman Sachs said the US total federal government debt would exceed $35 trillion by January 2025, which equals more than $100,000 for each US citizen.

The House of Representatives and the Senate passed the legislation last week after Biden and House of Representatives Speaker Kevin McCarthy reached an agreement following tense negotiations.

The Treasury Department had warned it would be unable to pay all its bills on Monday if Congress had failed to act by then.

Biden signed the Fiscal Responsibility Act of 2023 into law on Saturday afternoon, a day after hailing it as a bipartisan triumph in his first Oval Office address to the nation as president.

The bill signing, which was closed to the media, marked a lowkey, symbolic end to a crisis that vexed Washington for months, forced Biden to cut short a trip to Asia and threatened to push the US to the brink of an unprecedented economic crisis.

The Republican-controlled House voted 314 to 117 to approve the bill, and the Democrat-controlled Senate voted 63 to 36.

Fitch Ratings said on Friday that the US’ AAA credit rating would remain on negative watch despite the agreement that will allow the government to meet its obligations.

In January the US reached its debt limit of $31.4 trillion, more than 120 percent of its annual GDP. For months, as the White House and Congress were locked in a tugof-war over terms for lifting the debt ceiling, the Treasury Department has been using extraordinary measures to avoid default.

Treasury Secretary Janet Yellen had warned that the country could run out of money to pay its bills on time if Congress failed to address the debt ceiling by June 5.

The debt ceiling is a cap on the total amount of money that the US is authorized to borrow to fund the government and meet its financial obligations.

Since 1945 the US has raised its debt ceiling 103 times.

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2023-06-05T07:00:00.0000000Z

2023-06-05T07:00:00.0000000Z

https://chinadaily.pressreader.com/article/281908777534784

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