US Averts First-ever Default As Congress Passes Deal

US senators voted to suspend the federal debt limit on Thursday, eliminating the threat of a disastrous credit default just four days ahead of the deadline set by the Treasury.

The upper chamber of Congress rubber-stamped a bill passed a day earlier by the House of Representatives to extend the country's borrowing authority through 2024 – staving off the next showdown until after the presidential election.

The Treasury Department had warned it would be unable to pay all its bills on June 5 if Congress failed to act by then.

"We are avoiding default tonight," Senate Majority Leader Chuck Schumer said on Thursday as he steered the legislation through his 100-member chamber.

Before the vote, senators tore through nearly a dozen amendments – rejecting all of them – before the final vote sending the bill to Biden for signing into law before Monday's deadline.

With this legislation, the statutory limit on federal borrowing will be suspended until January 1, 2025. (AFP/Reuters)