US Senate passes crucial deal to avoid debt crisis days before deadline

The US Senate has voted through a crucial deal to raise the country’s debt ceiling with just days to spare.

Senators followed the House of Representatives in passing the agreement, which will be sent to Joe Biden to be signed into law before Monday’s deadline.

Had the cut-off date been missed, it could have led to the potentially catastrophic scenario where the world’s most powerful economy defaulted on its national debts.

Thursday night’s vote, which ended 63-36 in favor, came after months of bickering between Democrats and Republicans over the state of America’s finances.

The Treasury had warned it would be unable to pay all of its bills on 5 June if Congress failed to act by then, with the debt ceiling standing at $31.4trn.

Senate majority leader Chuck Schumer said with the deal having passed, “America can breathe a sigh of relief”.

Once signed by Mr Biden, the bill will suspend the statutory limit on federal borrowing until 1 January 2025 – after the next presidential election.

Mr Biden had thrashed out the terms of the deal himself with House speaker Kevin McCarthy, a Republican.