Joe Biden signs 'critical' deal to raise US debt ceiling

Joe Biden signs 'critical' deal to raise US debt ceiling

Joe Biden has signed a “critical” budget deal to raise the debt ceiling for the US, saving the country from falling into an unprecedented default – the failure to make debt repayments.

The US president signed the bill in private at the White House on Saturday.

The Treasury Department had warned that the country would start running short of cash on Monday, which would have sent shockwaves through the US and global economies

The US debt limit stands at $31.4trn and raising it will ensure that its government has enough to borrow to pay debts already incurred.

The deal comes after weeks of a stand-off where the Republicans would not agree to raise the country’s borrowing limit unless the Democrats cut spending.

An agreement was eventually passed by the House of Representatives and the Senate last week, which suspends the debt limit until 2025 and restricts government spending.

US politicians now have budget goals for the next two years to try and stabilize its economy as next year’s presidential election looms.