USA avoids default again

The U.S. Senate has decided to raise the previous spending limit for the U.S. government just before a deadline has expired, the exceeding of which would have caused a financial catastrophe for the entire Western world without raising the limit.

At the last minute, the U.S. Senate reached an agreement late on Thursday to avert U.S. insolvency. The bipartisan bill to raise the U.S. debt limit was passed by a vote of 63 to 36, just one day after the U.S. House of Representatives approved the proposal. The bill was forwarded to US President Joe Biden, who had previously announced that he would sign the measure immediately.

The new debt easing is intended to avert economic catastrophe, as there are only a few days left before the U.S. defaults on June 5 on its obligations for $31.4 trillion in debt accumulated to date.

Such a default would have limited Washington's ability to borrow more or pay its current obligations. It could also cause financial chaos abroad – with a significant negative impact on prices and mortgage rates in many other countries as well.

The bill was supported by 44 representatives of the Democratic Party and 17 representatives of the Republican Party, as well as two independent representatives. Thirty-one "Republicans" were opposed, including physician John Barrasso as a member of his party leadership in the chamber. Formally, the adoption of the measure required 60 votes in this chamber with a total of 100 seats.

The Republican and Democratic parties have been struggling for weeks to reach an agreement on raising the debt ceiling. Again, lengthy debates over spending priorities jeopardized the passage of the measure amid growing fears that the "Republicans" who hold a majority in the House would not support the so-called Fiscal Responsibility Act due to opposition from within their own ranks.

Some Republican lawmakers had previously dismissed Biden and the Democratic Party's warning of an imminent U.S. default as "scaremongering" to push through their fiscal policies.

Former U.S. President Donald Trump, who plans to run again as a candidate in the 2024 elections, also criticized the bill. Earlier this week, he told a radio station in Des Moines, Iowa, that he "would have accepted default" if he had not been able to reach a desirable agreement.

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