The US Senate voted on Tuesday to adopt a debt limitation bill, just hours before a midnight default deadline.
The measure, which allows an increase in America’s debt ceiling while cutting its huge budget deficit, was agreed by 74 to 26 votes.
Having completed its path through Congress, the bill was then signed by President Barack Obama.
“We’ve seen in the past few days that Washington has the ability to focus when there’s a timer ticking down and when there’s a looming disaster,” said the US leader outside the White House.
“It shouldn’t take the risk of default or the risk of economic catastrophe to get folks in this town to get together and do their jobs.“
President Obama said the bill was a first step towards ensuring the US lives within its means.
But the US leader made clear he expects to see tax increases included in any plan to tackle America’s deficit, which has been tasked to a new Congressional committee.
Before the Senate vote, lawmakers in the US House of Representatives, the main stumbling block to the bill’s approval, voted by 269 to 161 to adopt the measures.
Obama signs US debt bill