The spectre of an imminent US default on its debt disappeared as legislation to increase America’s borrowing authority cleared its last remaining hurdle in the Senate and headed to President Barack Obama for enactment.
The last-minute congressional approval of an increase in the debt ceiling came after weeks of heated rhetoric and fraught negotiations over fiscal policy that carried the country to the brink of a potential economic calamity, threatening its triple A credit rating and the status of Treasury bonds as a safe harbour for global investors.
“I think this is a good result but a terrible process,” Tim Geithner, US Treasury secretary, told ABC television on Tuesday. “In the United States, I think confidence here was absolutely very damaged by this spectacle they’ve seen in Washington of a significant number of elected officials in this country threatening default.”