Biden signs debt ceiling bill, pulling US back from brink of default

With just two days to spare, President Joe Biden has signed legislation lifting the nation’s debt ceilingavoiding an economically disastrous default on the federal government’s debt.

The White House announced the signing, held privately at the White House, on Saturday in an emailed statement in which Biden thanked congressional leaders for their partnership.

The Treasury Department had warned that the country would start running out of cash to pay all its bills on Monday, which would have shocked the US and world economies.

Republicans had refused to raise the nation’s debt limit unless Democrats agreed to cut spending, sparking a standoff that was not resolved until weeks of intense negotiations between the White House and House Speaker Kevin. McCarthy.

The final agreement, approved on Wednesday by the House and on Thursday by the Senate, suspends the debt limit until 2025 -after the next presidential elections- and restricts public 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.

“Approving this budget agreement was essential. The stakes could not have been higher,” Biden said from the Oval Office on Friday night. “Nothing would have been more catastrophic” than a default on the country’s debt, he said.

“Nobody got everything they wanted, but the American people got what they needed,” Biden said, noting the “compromise and consensus” in 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 combat climate change. He also highlighted the ways in which he undermined Republican efforts to roll back their agenda and achieve deeper cuts.

“We are cutting spending and reducing deficits at the same time,” Biden said. “We are protecting important priorities from Social Security to Medicare, Medicaid, Veterans, and our transformative investments in clean energy and infrastructure.”

Even as he vowed to continue working with the 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 that suggested he may need to wait until a second term. “I’m going back,” she said. “With your help, I’m going to win.”

‘Good of the country’

Biden’s comments were the most detailed comments from the Democratic president on the compromise he and his staff brokered. He remained largely publicly silent during the high-level talks, a decision that frustrated some members of his party but was intended to allow space for both sides to reach an agreement and for lawmakers to vote at the congressional desk. he.

Biden praised McCarthy and his negotiators for operating in good faith, and all congressional leaders for ensuring speedy passage of the legislation. “They acted responsibly and put the good of the country before politics,” he said.

Overall, the 99-page bill restricts spending for the next two years and changes some policies, including imposing new work requirements for older Americans receiving food aid and approving a natural gas pipeline in Appalachia. which many Democrats oppose. Some environmental rules have been changed to help expedite approvals for infrastructure and energy projects, a move long sought by moderates in Congress.

The Congressional Budget Office estimated that it could actually expand full eligibility for federal food assistance by eliminating work requirements for veterans, the homeless, and youth leaving foster care.

The legislation also bolstered funding for defense and veterans, cut some new money for the IRS and rejected Biden’s call to roll back Trump-era tax breaks for corporations and the wealthy to help to cover the nation’s deficits.

But the White House said plans by the IRS to step up tax enforcement for high-income individuals and corporations would continue.

The deal imposed an automatic across the board 1 percent cut to spending programs if Congress failed to pass its annual spending bills, a move designed to pressure lawmakers from both parties to reach consensus before it was finalized. the 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 tally was 63 to 36, including 46 Democrats and independents and 17 Republicans in favor, 31 Republicans along with four Democrats and one independent opposing Democrats.

The vote in the House was 314-117.