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U.S. Avoids Debt Default as Congress Passes Fiscal Plan

  • Bill goes to Obama for his signature before Nov. 3 deadline

Congress passed a two-year bipartisan budget plan that avoids a catastrophic default on U.S. debt, increases spending on domestic and defense programs and ends months of turmoil among House Republicans.

The 64-35 Senate vote early Friday, following House passage two days earlier, sends President Barack Obama a bill that will extend U.S. borrowing authority until March 2017, after he leaves office. The agreement likely frees Obama of protracted fiscal battles with congressional Republicans for the rest of his term. It also means House Speaker Paul Ryan, a Wisconsin Republican, won’t have to deal with a fight that helped drive his predecessor from office.

"This agreement isn’t perfect," Senate Majority Leader Mitch McConnell, a Kentucky Republican, said Thursday on the Senate floor. "But here’s the bottom line: This is a fully offset agreement that rejects tax hikes, secures long-term savings through entitlement reforms, and provides increased support for our military."

The measure, H.R. 1314, includes a two-year deal to increase defense and non-defense spending levels by $80 billion in 2016 and 2017, paid for with future savings and revenue. The agreement diminishes, but doesn’t eliminate, the odds of a government shutdown because lawmakers still must work out details before current funds expire Dec. 11.

Lawmakers were racing against a Nov. 3 deadline to avoid a debt default. The plan faced opposition from some Senate Republicans, including three 2016 presidential hopefuls who denounced the deal although their own party leaders crafted it.

Voting for the measure were all 46 members of the Democratic caucus and 18 Republicans, while 35 Republicans opposed it.

Congress has struggled to raise the debt limit and fund the government since 2011, when Republicans took House control and...