Legislation to prevent a potentially hugely damaging US debt default has been passed by the House of Representatives in Washington.
The bill, which gives effect to a deal reached last weekend between US president Joe Biden and the speaker of the House of Representatives Kevin McCarthy, now goes to the US Senate for approval.
The legislation suspends for two years the legal limit on the amount of money the US Government can borrow in return for some spending restrictions and other conditions.
More than 70 Republicans in the House of Representatives voted against the bill on Wednesday night while 46 Democrats also opposed the measure.
Hardline conservative members of the Republican Party in the House of Representatives had denounced the Biden/McCarthy agreement as not going far enough in reducing government spending.
Progressives in the Democratic Party had objected to new work requirements under the deal for people accessing some government social support programmes.
Overall the bill passed by 314 votes to 117 in the House of Representatives.
However, more Democrats backed the legislation than Republicans.
Mr Biden said after the vote that the agreement reached with Mr McCarthy represented “a bipartisan compromise” and that neither side got everything it wanted.
He urged the US Senate to pass the bill as quickly as possible.
Treasury secretary Janet Yellen warned last week that unless the ceiling on borrowing was either suspended or raised, the US government would be unable to pay its bills from as early as next Monday.
The White House has warned that a US debt default would generate widespread turmoil in both the domestic and global economy. It suggested that in a protracted default up to eight million people could lose their jobs as unemployment soared.
In a statement on Wednesday night Mr Biden said: “This agreement is good news for the American people and the American economy. It protects key priorities and accomplishments from the past two years (of his administration), including historic investments that are creating good jobs across the country. And, it honours my commitment to safeguard Americans’ healthcare and protect social security, Medicare, and Medicaid. It protects critical programs that millions of hardworking families, students, and veterans count on.”
Mr McCarthy urged his members on Wednesday to support the bill on the basis that it represented a “small step putting us on the right track”.
He highlighted the spending cuts and new work requirements Republicans had secured in the deal.
Following the vote in the House of Representatives attention will now turn to whether hardline conservatives who are angry at Mr McCarthy over the deal with Mr Biden, will now move to try oust him from the post of speaker.
The deal will see the ceiling on the amount the US government can borrow suspended for a two-year period. Crucially for the White House, this will take the issue off the political agenda in the run in to the 2024 presidential election.
In return for the suspension of the debt ceiling, the president and Mr McCarthy agreed a two-year budget deal that would hold spending flat for 2024 and increase it by one per cent for 2025.
Military spending will increase at a higher rate.
The deal also includes provisions to speed up the permitting process for certain energy projects. It would also claw back unused Covid-19 funds and expand work requirements for food aid programmes to additional recipients.
