With only two days to sparePresident Joe Biden signed legislation on Saturday that lifts the ceiling of the nation’s debtavoiding one unprecedented defect on the federal government’s debt.
The White House announced the signing, made privately at the White House, in an emailed statement in which Biden thanked congressional leaders for their partnership.
The Department of Finance had warned that the country would start running out of cash to pay all its bills on Monday, sending shockwaves through the US and world economies.
Republicans refused to raise the nation’s debt limit unless Democrats agreed to cut spending, sparking a standoff that wasn’t resolved until weeks of intense negotiations between the White House and Speaker of the House Kevin McCarthyR-Calif.
The final agreementapproved by the House on Wednesday and the Senate on Thursday, suspends the debt limit until 2025 — after the next presidential election — and restricts government spending. It gives lawmakers budget targets for the next two years in hopes of ensuring fiscal stability as the political season heats up.
Raising the nation’s debt limit, now at $31.4 trillion, will ensure that the government can borrow to pay off debts already incurred.
“Passing this budget deal was critical. The stakes couldn’t have been higher,” Biden said from the Oval Office friday evening “Nothing would have been more catastrophic,” he said, than defaulting on the country’s debt.
“Nobody got everything they wanted, but the American people got what they needed,” Biden said, highlighting the “commitment and consensus” of the deal. “We avoided an economic crisis and an economic collapse.”
Biden took the opportunity to detail the accomplishments of his first term as he runs for re-election, including support for high-tech manufacturing, infrastructure investments and financial incentives to fight climate change. He also highlighted the ways in which he held back Republican efforts to reverse his agenda and achieve deeper cuts.
“We’re reducing spending and reducing deficits at the same time,” Biden said. “We’re protecting important priorities from Social Security to Medicare and Medicaid to veterans and our transformative investments in infrastructure and clean energy.”
While pledging to continue working with Republicans, Biden also drew contrasts with the opposing party, particularly when it comes to raising taxes on the wealthy, something the Democratic president has sought.
It’s something he suggested might have to wait until a second term.
“I’ll be back,” he said. “With your help, I will win.”
Biden’s comments were the Democratic president’s most detailed comments yet on the compromise he and his staff negotiated. He remained largely silent publicly during the high-stakes talks, a move that frustrated some in his party, but was intended to give room for both sides to reach a deal and for lawmakers to vote on it in your desk
Biden praised McCarthy and his negotiators for operating in good faith, and all congressional leaders for ensuring swift passage of the legislation. “They acted responsibly and put the good of the country ahead of politics,” he said.
Overall, the 99-page bill curbs spending over the next two years and changes some policies, including imposing new work requirements for older Americans on food assistance and giving the green light to a natural gas pipeline from Appalachia that many Democrats oppose. Some environmental regulations were modified to help streamline approvals for infrastructure and energy projects, a measure long sought by moderates in Congress.
The Congressional Budget Office estimates that it actually could expand full eligibility for federal food assistancewith the removal of job requirements for veterans, the homeless and youth leaving foster care.
The legislation also bolsters defense and veterans funds, cuts some new money for the Internal Revenue Service and rejects Biden’s call to roll back Trump-era tax breaks for corporations and the wealthy to help cover the nation’s deficits. But the White House said the IRS’s plans to step up enforcement of tax laws for high-income earners and corporations will continue.
The deal imposes an automatic 1 percent cut in spending programs if Congress fails to pass its annual spending bills, a move designed to pressure lawmakers from both parties to reach a deal before the end of the year. fiscal year in September.
In both chambers, more Democrats supported the legislation than Republicans, but both parties were critical of its passage. In the Senate the balance was 63-36, including 46 Democrats and independents and 17 Republicans in favor, 31 Republicans along with four Democrats and one independent who caucuses with the opposing Democrats.
The vote in the House was 314 to 117.
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AP Congressional Correspondent Lisa Mascaro contributed to this report.
