The US Senate voted to raise the debt ceiling until December 3, bringing some relief to investors and executives who were concerned about a national default as soon as this month.
The House of Representatives voted 50-48 late Thursday to increase the national borrowing limit by $480 billion and prevent a default for the next two months.
Following a critical procedural vote earlier in the evening, the bill was able to pass the 100-member chamber by a simple majority. During the procedural vote, 11 Republican senators joined all 50 Democrats in voting to stop the bill's debate and clear the 60-vote "filibuster" barrier.
“I said we needed to pass a bill to address the debt limit by the end of the week, and that is exactly what we did,” said Chuck Schumer, the Senate’s top Democrat.
The bill must be adopted by the Democratic-controlled House of Representatives before being delivered to President Joe Biden to be signed into law.
Earlier on Thursday, Schumer told legislators he had achieved an agreement with Senate Majority Leader Mitch McConnell, after McConnell stated his party would support a short-term extension of the nation's borrowing ceiling. Republicans have been rejecting Democrats' calls to sign on to extending the debt ceiling for months, attempting to tie the country's existing debt to the Biden administration's ambitious spending plans.
Many rank-and-file Republicans were outraged by McConnell's arrangement, accusing him of caving in to Democratic demands.
This week, Biden relied on business leaders to assist him make the case for why Congress needed to act to raise the debt ceiling and avert a default. The Treasury Secretary, Janet Yellen, has warned that if no agreement was reached by October 18, the US government will run out of money.