The effort to avoid a U.S. default shifts to the Senate after the House of Representatives approved a measure late Wednesday to suspend the country's borrowing limit and cap some federal spending.
Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell said they hope to get the bill approved in the Senate in the coming days and send it to President Joe Biden for his signature.
The U.S. Treasury Department has warned it will run out of money to pay the nation's bills as early as Monday if the debt limit is not raised.
The measure passed in the House by a vote of 314-117 despite objections by Republicans who said it did not go far enough in cutting spending and by Democrats who said it cut too much.
Seventy-one lawmakers from the majority Republican party voted against the bill, as did 46 Democrats.
In a statement following Wednesday's vote, Biden celebrated the agreement as a "bipartisan compromise."
"It protects key priorities and accomplishments from the past two years, including historic investments that are creating good jobs across the country. And, it honors my commitment to safeguard Americans' health care and protect Social Security, Medicare, and Medicaid. It protects critical programs that millions of hardworking families, students, and veterans count on."
McCarthy told reporters that getting the bill passed "wasn't an easy fight." He emphasized the budget savings and criticized Democrats who want to separate the debate about spending from the task of suspending the debt limit.
"We put the citizens of America first and we didn't do it by taking the easy way," McCarthy said. "We didn't do it by the ways that people did in the past by just lifting it, we decided you had to spend less and we achieved that goal."
McCarthy said he intends to follow Wednesday's action with more efforts to cut federal spending.
The bill now heading to the Senate includes waiving the existing borrowing limit until January 2025 and a two-year budget deal that keeps federal spending flat in 2024 and increases it by 1% in 2025. The measure does not raise taxes, nor will it stop the national debt total from continuing to increase, perhaps by another $3 trillion or more over the next year and a half.
Other pieces of the legislation include a reduction in the number of new agents hired by the country's tax collection agency, a requirement that states return $30 billion in unspent coronavirus pandemic assistance to the federal government and extending from 50 to 54 the upper age bracket for those required to work in order to receive food aid.
Some information for this report came from The Associated Press, Agence France-Presse and Reuters.