The U.S. Treasury announced on Monday that the federal government can meet all of its financial obligations following the bipartisan deal to suspend the debt ceiling.
“Now that Congress has acted to suspend the debt limit, Treasury has the tools needed to ensure that the U.S. continues to meet all of our obligations,” said Treasury spokesperson Christopher Hayden in a statement.
President Biden signed the “Fiscal Responsibility Act” into law on Saturday, suspending the debt ceiling until 2025 and averting “an economic crisis.”
Negotiations over the agreement, brokered by Biden and House Speaker Kevin McCarthy (R-CA) on March 27, had gone down to the wire. Treasury Secretary Janet Yellen had warned that without lifting the debt ceiling, the government would have completely run out of money and defaulted on its financial obligations this Monday.
The Senate voted 63-36 late Thursday to give final approval on the deal, mostly along party lines, though five Democrats and a Democratic-leaning Independent voted against the bill, along with 31 Republicans.
The vote in the upper chamber came a day after the House voted 314 to 117 for its passage, with support for the deal coming from 16 more Democrats than Republicans in the lower chamber.
The deal suspends the debt ceiling beyond next year’s presidential election into 2025. It also caps spending in the 2024 and 2025 budgets, claws back unused Covid pandemic funds, speeds up the permitting process for some energy projects, and include extra work requirements for aid programs like food stamps, though overall funding is mostly held flat for domestic programs.
