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The U.S. hit its US$31.4-trillion debt limit in January and could have defaulted on its debt obligations by June 5 without raising or suspending the limit.
On Wednesday, the U.S. House of Representatives Wednesday passed a bill that lifts the federal government debt ceiling until Jan. 1, 2025. Lawmakers voted to pass the bill 314 to 117 after it was introduced to Congress late Sunday.
Entitled The Fiscal Responsibility Act of 2023, the act still needs approval by the U.S. Senate and U.S. President Joe Biden's signature to avoid a historic default on government debt.
"I urge the Senate to pass it as quickly as possible so that I can sign it into law," said Biden in a statement following the passage of the act by the House.
The U.S. debt limit would be increased to actual debt level on Jan. 2, 2025, which means the U.S. Department of Treasury will have to resort to extraordinary measures again shortly following the 2024 presidential election.
The stupid drama over debt ceiling and spending cuts will result in cuts of $100 billion per year — less than what Biden sent to Ukraine. ��
US budget for this year is whopping $6.3 trillion — or 24% of GDP.
According to an estimate by Goldman Sachs, U.S. total federal government debt would exceed US$35 trillion by January 2025.
Biden and House Republicans reached an agreement in principle on Saturday to avert a default on government debt.
The United States hit its US$31.4-trillion debt limit in January and could have defaulted on its debt obligations by June 5 without raising or suspending the limit.
The threat of U.S. default on its government debt has recently drawn widespread concerns from home and abroad, with Fitch Ratings placing the U.S. AAA-rated long-term foreign-currency issuer default rating on a "negative watch" recently.