NEW YORK, June 3 (Xinhua) -- U.S. President Joe Biden signed Fiscal Responsibility Act of 2023 into law Saturday afternoon so as to avoid a historic default on government debt.
The bipartisan act suspends the public debt limit through Jan. 1, 2025, and increases the limit to the actual debt level on Jan. 2, 2025.
According to Goldman Sachs, a global investment bank, U.S. total federal government debt would exceed 35 trillion U.S. dollars by January 2025, which equals more than 100,000 dollars for each U.S. citizen.
"This bipartisan agreement is a big win for our economy and the American people," Biden said just moments after the Senate passed the bill late Thursday.
The United States reached in January its debt limit of 31.4 trillion dollars, more than 120 percent of its annual GDP. For months, as the White House and Congress were locked in a tug-of-war over terms of lifting the debt ceiling, the Treasury Department has been using "extraordinary measures" to avoid default.
U.S. Treasury Secretary Janet Yellen has warned that the country could run out of money to pay its bills on time if Congress failed to address the debt ceiling by June 5.
The debt ceiling is a cap on the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations.
Since 1945, the United States has raised its debt ceiling 103 times.