The U.S. Senate on Thursday night approved a bill to increase the nation's borrowing limit in the short term to avert a looming debt default, Trend reports citing Xinhua.
The Senate voted 50-48 along party lines to raise the federal government's debt limit by 480 billion U.S. dollars, which would allow the U.S. Treasury Department to meet obligations through Dec. 3.
The vote came after Senate Majority Leader Chuck Schumer announced Thursday morning that he had reached an agreement with Republicans to extend the debt limit into December.
The short-term debt limit increase still needs a vote in the House of Representatives, which is currently on a break through next week, according to local media.
The White House on Thursday called the bill a "positive step forward," signaling support for it.
"And it gives us some breathing room from the catastrophic default we were approaching because of Senator (Mitch) McConnell's decision to play politics with our economy," White House Principal Deputy Press Secretary Karine Jean-Pierre told reporters.
"Addressing the debt limit shouldn't be a partisan football. This is about paying the debt that both parties have already incurred," Jean-Pierre said.
U.S. Treasury Secretary Janet Yellen repeatedly warned that the United States could default on its debt if Congress fails to raise or suspend the debt limit before Oct. 18.
"I do regard October 18th as a deadline. It would be catastrophic to not pay the government's bills, for us to be in a position where we lack the resources to pay the government's bills," Yellen said Tuesday in an interview with CNBC.
As part of a bipartisan budget deal enacted in August 2019, Congress suspended the debt limit through July 31. After the debt limit was reinstated on Aug. 1, the U.S. Treasury Department began using "extraordinary measures" to continue to finance the government on a temporary basis.