The US House of Representatives voted on Wednesday to advance a bill that would raise the nation's $31.4 trillion debt ceiling days before a potential default.
The bill, titled the Fiscal Responsibility Act of 2023, will go to the Senate after a 314-117 vote in the House.
If it passes the Senate, President Joe Biden can sign it into law to avoid a damaging default that could reverberate through global markets.
"Tonight, the House took a critical step forward to prevent a first-ever default and protect our country’s hard-earned and historic economic recovery," Mr Biden said in a statement.
The White House and House Majority Leader Kevin McCarthy reached an agreement on the bill over the weekend, and have been lobbying for bipartisan support on the proposed deal.
"This budget agreement is a bipartisan compromise. Neither side got everything it wanted. That’s the responsibility of governing," Mr Biden also said.
White House Press Secretary Karine Jean-Pierre said Mr Biden expects the bill to be on his desk by the June 5 deadline.
"I urge the Senate to pass it as quickly as possible so that I can sign it into law, and our country can continue building the strongest economy in the world," he also said.
Should it be signed into law, the bill would suspend the nation's debt limit through 2025, sparing lawmakers from a potentially bruising political battle during the 2024 presidential election.
The non-partisan Congressional Budget Office said that the debt ceiling bill would reduce the US's deficit by $1.5 trillion over the next decade.
The brokered deal also claws back unused Covid-19 funding, caps spending in 2024 and 2025, allows for speedier permitting processes on energy projects and includes new work requirements for those who rely on social programmes to receive food.
Wednesday's vote comes weeks after heated negotiations between Mr Biden and Mr McCarthy, whose brinkmanship has already resulted in the signs of market stress and a warning from ratings agency, Fitch, that the nation's credit rating could be downgraded.
“I can assure you that this was no easy task to get here, but what was on the line for the American people was real,” Shalanda Young, director of the office of management and budget and White House negotiator said.
The bill has faced opposition from progressive Democrats and hardline Republicans.
Chip Roy, one of the Republican Representatives who voted against the bill's passage on Tuesday, argued the proposal does not include the degree of spending cuts he and others had hoped for. Mr Roy and other opposing Republicans publicly floated the idea of removing Mr McCarthy as speaker in retaliation.
“There's going to be a reckoning,” Mr Roy said.
Mr McCarthy was confident that the bill would pass despite opposition from members within his own party.
“We’re going to pass the bill,” he said on Tuesday night, while also dismissing notions that he would be ousted as Speaker.
Progressive Democrats complained about the new work requirements included in the bill, among other provisions.
High-profile progressives including Pramila Jayapal and Alexandria Ocasio-Cortez said they would vote against the bill. Ms Ocasio-Cortez last week said she could not accept an agreement that was not a clean debt ceiling raise.
Ms Jayapal expressed concerns about the bill's environmental policy changes.
“He got us here and it’s on him to deliver the votes,” Ms Jayapal said of Mr McCarthy.
Shalanda Young urged Congress to pass the bill and added that the compromise reached between the White House and Republican leadership does not include all the big-ticket items each side had hoped for.
“I want to be clear: this agreement represents a compromise, which means no one gets everything that they want and hard choices had to be made,” she said.
Once the House approves the bill, it will advance to the Senate, where majority leader Chuck Schumer is hoping to pass it by the end of the week.
