by Trevor Hunnicutt
WASHINGTON, June 3 (Reuters) – U.S. President Joe Biden signed into law legislation on Saturday that provides for a temporary suspension of the U.S. debt ceiling, warding off the specter of a catastrophic default.
The House of Representatives and Senate passed the bill on Wednesday and Thursday, respectively, after Joe Biden and House Speaker Kevin McCarthy reached an agreement after tense negotiations.
Essentially, the agreement provides for the suspension of the American debt ceiling until January 1, 2025, i.e. after the presidential election of November 2024. It also sets a limit on public spending next year and in 2025. .
The Treasury Department had warned that the federal government would no longer be able to make payments from June 5.
“It was critical to get an agreement, and that’s really good news for the American people,” said Joe Biden, who signed the law into the White House. “Nobody got everything they wanted. But the American people got what they needed,” he added.
The rating agency Fitch announced on Friday that it was maintaining the “AAA” rating of the United States “under negative watch” despite the agreement which will allow the government to meet its obligations. (Reporting Trevor Hunnicutt, with contributions from Eric Beech and Nick Zieminski; French version Kate Entringer)
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