The US Senate passed legislation early on Friday extending government borrowing authority until 15 March 2017 and locking in a two-year budget plan to increase military and domestic spending by $80bn.
The measure now moves to Barack Obama for signing into law before a 3 November deadline when the treasury department has said it would exhaust the last of its borrowing capacity and begin to run short on funds to meet US payment obligations.
In a statement, the president said he applauded “the Democrats and Republicans who came together this morning to pass a responsible, long-term budget agreement that reflects our values, grows our economy and creates jobs”.
“This agreement is a reminder that Washington can still choose to help, rather than hinder, America’s progress, and I look forward to signing it into law as soon as it reaches my desk,” Obama said. “After that, Congress should build on this by getting to work on spending bills that invest in America’s priorities without getting sidetracked by ideological provisions that have no place in America’s budget process. If we can do that, we’ll help our workers and businesses keep growing the economy and building an America full of opportunity for all.”
Earlier a 63-35 vote protected the bill from any delaying tactics and cleared the way for its swift passage. The legislation then moved to a full vote and was passed.
Several of the Republican presidential candidates had criticized the legislation, aimed at averting a catastrophic default, avoiding a partial shutdown and setting government spending priorities for two years.
Obama negotiated the accord with Republican and Democratic leaders who were intent on steering Congress away from the brinkmanship and shutdown threats that have haunted lawmakers for years. Former Speaker John Boehner felt a particular urgency days before leaving Congress, while lawmakers looked ahead to presidential and congressional elections next year.
The opposition was strong in the Senate, and White House hopeful Republican Senator Rand Paul left the campaign trail and returned to the Capitol to criticize the deal as excessive Washington spending.
Another Republican presidential candidate, Ted Cruz, speaking on the Senate floor late on Thursday, complained that Republican majorities had given Obama a “diamond-encrusted, glow-in-the-dark Amex card” for government spending.
The agreement raises the government debt ceiling until March 2017, removing the threat of an unprecedented national default that would have come in a few days. At the same time it sets the budget of the government through the 2016 and 2017 fiscal years and eases punishing spending caps by providing $80bn more for military and domestic programs, paid for with a hodgepodge of spending cuts and revenue increases touching areas from tax compliance to spectrum auctions.
The deal averts a looming shortfall in the social security disability trust fund that threatened to slash benefits, and heads off an unprecedented increase in Medicare premiums for outpatient care for about 15 million beneficiaries.
The promise of more money for the military ensured support from defense hawks like Senator John McCain, chairman of the Armed Services Committee, while additional funds for domestic programs pleased Democrats.
Obama and Democratic allies like House minority leader Nancy Pelosi of California were big winners in the talks, but Republican leaders cleared away political land mines confronting the party on the eve of 2016 campaigns to win back the White House and maintain its grip on the Senate.
The measure leaves a clean slate for new Speaker Paul Ryan as he begins his leadership of the House.
Obama had repeatedly said he would not negotiate budget concessions in exchange for increasing the debt limit, though he did agree to package the debt and budget provisions.
“I am as frustrated by the refusal of this administration to even engage on this [debt limit] issue,” said finance committee chairman Orrin Hatch. “However the president’s refusal to be reasonable and do his job when it comes to our debt is no excuse for Congress failing to do its job and prevent a default.”
The budget relief lifts caps on the appropriated spending passed by Congress each year by $50bn in 2016 and $30bn in 2017, evenly divided between defense and domestic. Another $16bn or so would come each year in the form of inflated war spending, evenly split between the defense and state departments.
Cuts include curbs on Medicare payments for outpatient services provided by certain hospitals and an extension of a two percentage point cut in Medicare payments to doctors through the end of a 10-year budget. There is also a drawdown from the strategic petroleum reserve and savings reaped from a justice department fund for crime victims that involves assets seized from criminals.
Reuters and Associated Press contributed to this article
