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Debt ceiling deal: US House overwhelmingly passes bill

The House of Representatives has approved a deal to allow the US to borrow more money, days before the world’s biggest economy is due to start defaulting on its debt.

The measure passed the chamber by a vote of 314-117, with defections on both sides of the aisle.

The US Senate must vote on the bill later this week before President Joe Biden can sign it into law.

The government is forecast to hit its borrowing limit on Monday 5 June.

That has left little margin for error as lawmakers race to avoid the US defaulting on its $31.4tn (£25tn) debt, which underpins the global financial system.

On Wednesday evening, 165 Democrats joined 149 Republicans in approving the 99-page bill to raise the debt ceiling, allowing it to pass the House by the required simple majority.

With Republicans in control of the lower chamber of Congress and Democrats holding sway in the upper chamber and White House, a deal had proven elusive for weeks until President Biden and House Speaker Kevin McCarthy inked a bipartisan compromise over the weekend.

Kevin McCarthy was able to push Joe Biden and reluctant Democrats to the negotiating table by passing a bill that raised the debt limit but included a laundry list of conservative priorities.

Then he was able to hold his party together as he struck a less-ambitious deal with the president that modestly trimmed the growth in federal spending and added some new conditions on aid for low-income Americans.

That wasn’t enough for a group of hard-line conservatives, some of whom hinted they would unseat Mr McCarthy and force a new election for Speaker.

But by Wednesday, even the hottest of firebrands were backing away from their rhetoric. And when it came time to vote, a majority of Republicans approved Mr McCarthy’s deal.

While the hard-liners may grumble, it is clear they don’t have anywhere near the level of support they would need to replace Mr McCarthy – or even any idea who to replace him with.

The agreement suspends the debt ceiling until 1 January 2025.

The legislation would result in $1.5tn in savings over a decade, the non-partisan Congressional Budget Office said on Tuesday.

But the bill’s passage had been in jeopardy after lawmakers from both parties voiced opposition.

Ultra-conservative Republicans complained they had secured too few concessions in exchange for raising the debt limit.

Source: bbc