On Thursday, President Joe Biden signed a bill to raise the U.S. debt ceiling by $2.5 trillion after Senate Democrats and Republicans hammered out a deal this week to avoid a filibuster. The Senate passed the extension by a party-line vote of 50-49 on Tuesday, and the House approved the measure 221-209.
Treasury Secretary Janet Yellen had warned Congress that defaulting on the national debt could have had catastrophic consequences for the U.S. economy. The United States has never defaulted on its debt obligations. Failing to reach an agreement would have stopped payments that millions of Americans rely on, including paychecks to federal workers, Medicare benefits and military salaries.
The debt ceiling increase covers all necessary funding until 2023, meaning the issue won’t need to be addressed again until after the 2022 midterm elections.
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