The US debt limit bill protects the "full faith and credit" of the country and preserves its financial leadership, Treasury Secretary Janet Yellen said.
"A default would have caused severe hardship for American families, potentially leading to the loss of millions of jobs and trillions in household wealth, and higher financing costs for American taxpayers for years to come," she said Thursday in a statement.
After months of debate, the bill that will prevent American economy to default on its debt obligations finally passed the Congress late Thursday. It will suspend the $31.4 trillion cap on the US federal government's borrowing limit through January 2025.
"Congress has a duty to ensure that the United States can pay its bills on time, and I continue to strongly believe that the full faith and credit of the United States must never be used as a bargaining chip," Yellen said.
The Treasury chief has repeatedly urged Congress in recent months to suspend or raise the debt limit to avoid a default on government obligations.
American economy hit its debt ceiling on Jan. 19, and Yellen said her agency has started taking "extraordinary measures" to avoid a default.
The US has never defaulted on its debt, while the debt ceiling has been raised 22 times between 1997 and 2022.
