US Senate votes to temporarily extend country’s debt ceiling to avert default

The US Senate voted to temporarily extend the country’s debt ceiling, less than two weeks before it was due to be reached.

Disagreements over the ceiling are not new. The ongoing row between Republicans and Democrats has caused jitters in the financial markets.

There were fears that the US would default on its national debt, with catastrophic global implications.

The Senate, the upper chamber of Congress, decided on Thursday by a vote of 50-48 to extend the debt ceiling until early December. The bill will now be sent to the House of Representatives for approval before it can be sent to President Biden for his signature.

The temporary measure raises the US debt ceiling to $480 billion.

The vote was held hours after Senate Majority leader Chuck Schumer, a Democrat, announced that a deal had been reached.

The announcement came after what Schumer’s Republican counterpart Mitch McConnell said were negotiations “in good faith” that had continued through the night.

The agreement comes less than two weeks before 18 October, the day the US Treasury Secretary Janet Yellen warned was the deadline to prevent the first ever US default.

US lawmakers will still have to address this issue near the new December deadline to avert a default.

If the US defaulted on debts analysts say it would severely hurt the country’s credit rating, plunge the global financial system into turmoil, and possibly lead to a self-inflicted recession.

Speaking after the vote Mr Schumer said Republicans had “played a dangerous and risky partisan game”. He added that “what is needed now is a long-term solution so we don’t go through this risky drama every few months”.