A measure to cut spending and raise the US debt ceiling to avert an unprecedented default cleared Congress this evening and headed to President Barack Obama to sign into law.
The Senate approved the measure by a vote of 74 to 26 after the House of Representatives passed it last night.
The Fitch ratings agency said the agreement to raise the US debt ceiling would allow the country to keep its triple-A rating. But Fitch said it would continue to review the country's long-term deficit profile to see if it merited being listed along with more healthy economies in the exclusive AAA club of borrowers.
The plan will see more than $2 trillion in government spending cuts but no increase in taxes, which President Obama had advocated.
The House of Representatives passed the bill comfortably in the end, but with many more votes from the Republicans than the Democrats, who appeared to have conducted a last-minute revolt.
President Obama has been castigated by some on the left of his own party. They say he caved in to the demands of a right-wing fringe. But the White House believes it was the best deal possible.
There will be substantial cuts in government expenditure but no agreed tax increases. For independent commentators this makes the deal less believable as a solution to America's daunting economic problems.
US spending slide adds to worries
Official figures show that US consumer spending fell in June, in the latest in a series of discouraging reports on the state of the world's largest economy.
Personal spending fell 0.2% in June from May, the Commerce Department said in a monthly report. The drop was the first since September 2009. Analysts had expected a slight increase of around 0.1%.
Personal income rose a modest 0.1%, also falling short of analysts' consensus forecasts of 0.2%.
A key driver of the US economy, consumer spending is closely watched as a barometer of economic growth.
Last Friday, the US government reported that US gross domestic product grew at a feeble annual rate of 1.3% in the second quarter of 2011, much worse than economists had expected. US manufacturing figures yesterday were also weak.
Today's figures showed that spending barely grew in the second quarter, inching up at an annual rate of only 0.1% - the weakest pace since the end of the 2007-09 recession.
The decline in spending in June came even as petrol prices retreated from their peak just above $4 a gallon in early May and suggested the much-anticipated bounce back in growth in the third quarter would lack vigour.