The bipartisan bill that lifts the government's $31.4 trillion debt limit has to be signed into law before a June 5 deadline to avoid a default.The US Senate voted in favor of a bipartisan deal to suspend the government's $31.4 trillion (€29.4 trillion) debt ceiling on Thursday.

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The Senate approved the bill with a vote of 63-36 in a race against time after months of partisan disagreements between Democrats and Republicans.

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This comes after the bill had already been passed by the House of Representatives on Wednesday.

It is the next crucial step towards the final passage of the bill into law before a potential default that could have a devastating effect on the US economy.

The bill now goes to US President Joe Biden to be signed into law.

"America can breathe a sigh of relief, a sigh of relief because in this process we are avoiding default," Democratic Majority Leader Chuck Schumer said in remarks to the Senate.

Earlier, Senate Republican leader Mitch McConnell also expressed his desire to swiftly pass the bill after it received overwhelming approval in the House.

What is in the bill?

The 99-page bill restricts spending for the next two years, suspends the debt ceiling into January 2025 and changes policies, including new work requirements for older Americans receiving food aid and greenlighting an Appalachian natural gas line that many Democrats oppose.

In the House, the bill passed 314-117 on Wednesday, surviving a rebellion from 71 conservative Republicans who voted no and argued the cuts did not go far enough.

They, ominously, hinted at the possibility of attempting to remove McCarthy from his position over the issue.

On the other side, Democrats had their own grievances. They criticized the new work requirements imposed on Americans aged 50-54 in the food aid program, the alterations made to the influential National Environmental Policy Act, and the approval of the controversial Mountain Valley Pipeline natural gas project, which they argued would hinder efforts to combat climate change.

Avoiding economic upheaval

While the hard-fought compromise did not satisfy everyone, lawmakers believed it was a preferable alternative to potential economic turmoil both domestically and internationally if Congress failed to take action.

The Congressional Budget Office, a nonpartisan entity, projected that the spending restrictions outlined in the package would lead to a $1.5 trillion reduction in deficits over the course of a decade — a key objective for Republicans aiming to address the national debt.

ss/rt (Reuters, AP)

(The above story first appeared on LatestLY on Jun 02, 2023 09:10 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).