The US president is set to sign into law a bipartisan deal to lift the government’s debt limit, avoiding a “crisis.”
US President Joe Biden dedicated his first public speech from the Oval Office to celebrating the bipartisan passage of the country’s debt ceiling bill, announcing a “crisis averted” from his desk at the White House.
“When I ran for president, I was told that the days of two-party politics were over and that Democrats and Republicans can no longer work together,” Biden said in his speech on Friday. “But I refused to believe that.”
The speech was a victory lap for Democrat Biden, who collaborated with Kevin McCarthy, the Republican Speaker of the House and his vocal critic, to hammer out the debt ceiling bill last month.
Passage of the bill in the Senate on Thursday all but ensures that the US will not default on its loans. The country was fast approaching a June 5 deadline set by the US Treasury, by which time the federal government would likely have run out of funds to pay its debts.
“Approving this budget agreement was essential. The stakes could not have been higher, ”Biden explained in his speech.
“Had we not been able to reach an agreement on the budget, there were extreme voices threatening to take America, for the first time in our 247-year history, into default on our national debt. Nothing, nothing would be more irresponsible. Nothing would have been catastrophic.”
If the US had reached its debt ceiling of $31.4 trillion, the limit on the federal government’s borrowing powers, experts predicted that the economic fallout could trigger a recession.
The US has likely seen its credit rating fall and its interest rates rise, and businesses and individuals that rely on government funds could have seen their payments paused. The White House estimated that a breach could have cost 8 million Americans their jobs.
Still, the road to Thursday’s 63-36 Senate vote was fraught with controversy. Far-right Republicans criticized the bill for not imposing deep enough cuts to discretionary government spending and for failing to provide an adequate boost to defense funding.
Meanwhile, members of the Democratic Party lamented anticipated spending limits that will affect social safety net initiatives, as well as increased work requirements for the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families ( TANF).
“Nobody got everything they wanted. But the American people got what they needed,” Biden said Friday, addressing the criticism. “We avoided an economic crisis and an economic collapse.”
For his part, McCarthy called Congress’ passage of the debt ceiling bill a “vote for the biggest savings in American history.” Among his provisions were terms to recover funds from the Internal Revenue Service, the US tax-collecting agency, as well as unspent COVID relief money.
The 99-page bill will suspend the debt ceiling until 2025, allowing the government to spend what it needs to cover its costs until then.
Biden has announced that he plans to sign the bill on Saturday, two days before the June 5 deadline.
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