U.S. House Passes Debt-Limit Bill, Easing Default Fears

The U.S. House of Representatives passed the debt-limit bill, averting a potential default.

Lawmakers in the Republican-controlled house approved the bill by 314-117 votes on Wednesday evening in Washington, ending weeks of uncertainty amid talks between President Joe Biden and Speaker Kevin McCarthy.

The agreement won the backing of two-thirds of House Republicans. The deal now goes to Senate, where Democrats have a majority.

That eases concerns around a default crisis for the remainder of Biden’s term as the debt ceiling has been suspended till Jan. 1, 2025.

Treasury Secretary Janet Yellen had warned that the U.S. risked a default if the ceiling was not raised before June 5.

The markets had been jittery as talks between Biden and McCarthy had remained inconclusive. The Republicans wanted to end or reduce funding for some of the key projects and policies of the Biden administration, including strict conditions for social security payouts, abandoning student loan waivers, and reducing funding to the IRS.

According to the nonpartisan Congressional Budget Office, the bill would cut deficits by $1.5 trillion over 10 years, Bloomberg reported.