US House passes debt bill, wards off default risk

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WASHINGTON: The House of Representatives on Monday approved a last-gasp deal to raise the U.S. borrowing limit in a decisive step toward averting a catastrophic debt default by the world's largest economy.

A day before the deadline to lift the debt ceiling, the passage by the Republican-controlled House of the $2.1 trillion deficit-cutting plan hammered out over the weekend cleared the way for the Senate to approve it.

The Democratic-controlled Senate was due to vote on the bill at noon (1600 GMT) on Tuesday and was widely expected to pass it.

This would send it to the desk of President Barack Obama, who has said he is anxious to sign the bill.

The House vote of approval had been considered the biggest obstacle to a solution of the crisis.

It signaled the end was in sight to a months-long partisan battle that had deadlocked the political system of the United States, alarming its international allies, shaking financial markets and diminishing the U.S. global image.

The bill passed in the House by 269 votes to 161, well over the required majority. Democrats were evenly split on the bill-- 95 for, 95 against -- while 174 Republicans voted for the measure, with 66 opposing it.

Up to the last minute, financial markets worldwide had been rattled by uncertainty over whether the compromise plan could pass the House in the face of objections from conservative Tea Party Republicans and liberal Democrats.

Having a deal in place by Tuesday to raise the U.S. government's $14.3 trillion borrowing limit will remove the risk of the United States not being able to borrow money to pay all of its bills. (Reuters)