Suspension of U.S. debt limit wins final congressional approval
February 1, 2013 9:00 AM EST
A bill allowing the U.S. government to borrow money beyond its record $16.4 trillion (£10.34 trillion) debt limit won final congressional approval on Thursday, clearing the way for President Barack Obama to sign it into law.
The Democratic-led Senate passed the bill, 64-34, a week after the Republican-controlled House of Representatives approved it, 285-144.
The legislation would put off for at least a few months a showdown over the debt limit between Republicans who demand more spending cuts to shrink deficits and Democrats who favour reducing deficits with a combination of spending cuts and tax hikes.
Several other potential budget skirmishes are likely over the next five weeks. Congress must consider what to do about automatic budget cuts set for the beginning of March and a measure to continue funding the operations of the government that must be in place by March 27.
Drafted by House Republican leaders, the bill passed Thursday marks a major retreat from their earlier vow to use the debt limit to extract more spending cuts from Obama. A fight over the debt limit in August 2011 led to a downgrade in the U.S. government's credit rating and sent markets tumbling.
By suspending enforcement of the debt limit, now expected to be reached as early as mid-February, the government would keep borrowing money and paying its bills until at least May 19.
Under the bill, the debt limit would have to be reset on May 19 to whatever level the debt reaches by then, likely about $17 trillion.
(Reporting by Thomas Ferraro; Editing by Jackie Frank and Sandra Maler)