The US House of Representatives has passed by 269 votes to 161 a last-gasp deal to avoid a federal debt default, BBC reports.
The bill was expected to be approved by the Senate and signed into law by President Barack Obama on Tuesday.
It raises the debt limit by up to USD 2.4tn (£1.5tn) from USD 14.3tn, and makes savings of at least UDS 2.1tn in 10 years.
There were cheers as Congresswoman Gabrielle Giffords, who was shot in the head in Tucson in January, made her first appearance on Capitol Hill. Ms Giffords, who moved through the chamber with minimal assistance from an aide, blew kisses and said: “Thank you, thank you.”
After months of bitterly partisan deadlock, House Republican and Democratic leaders swung behind the bill on Monday, ratifying a deal sealed the night before with a phone call from House Speaker John Boehner to President Obama.
House Democrats were evenly split on the legislation – 95 for and 95 against – while 174 Republicans voted for the measure and 66 opposed it. That vote was due to take place take place barely 12 hours before Washington is due – according to the US treasury department – to become unable to meet all its bills.
The vote in the Republican-controlled House was considered the biggest obstacle to the legislation; its approval by the Democratic-controlled Senate is viewed as all but certain.
In a key point for President Obama, the bill would raise the debt ceiling into 2013 – meaning he would not face another congressional showdown on spending in the middle of his re-election campaign next year.
The compromise deal deeply angered both right-wing Republicans and left-wing Democrats.
Liberals have been unhappy that the plan relies on spending cuts only and does not include tax rises, although Mr Obama could still let Bush-era tax cuts for the top brackets expire in January 2013.
House Republicans were displeased that the bill did not include more savings.