US President signed legislation lifting America’s debt ceiling and avoiding a potentially costly default on US debts

US President Barack Obama signed legislation lifting America’s debt ceiling Tuesday and avoiding a potentially costly default on US debts.

The measure is part of a package of severe cuts to offset the amount of the debt ceiling increase, negotiated in marathon sessions of both houses of Congress and passed into law with a 343-187 split, just hours before the US Treasury warned it would start running out of money.

“Congress has now approved a compromise to reduce the deficit and avert a default that would have devastated our economy,” Obama said in signing the historic deal. “It’s an important first step to ensuring that as a nation we live within our means.”

The new legislation mandates some $2.4 trillion in deficit and debt reduction – or roughly the amount of the increase in the debt ceiling – over 10 years that would leave few corners of the American economy untouched, according to Congressional projections.