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

With just two days to go, President Joe Biden has signed legislation lifting the country’s debt ceiling, avoiding an economically disastrous federal government bankruptcy.

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

The Treasury Department had warned that the country would run out of cash to pay all its bills on Monday, sending shockwaves through the US and the global economy.

Republicans had refused to raise the country’s borrowing limit unless Democrats agreed to cut spending, leading to a deadlock that was only resolved after weeks of intense negotiations between the White House and House Speaker Kevin McCarthy.

The final deal, passed by the House on Wednesday and the Senate on Thursday, suspends the debt limit until 2025 — after the next presidential election — and caps 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 country’s debt limit, now at $31.4 trillion, will allow the government to borrow to pay off debts already incurred.

“It was crucial to approve this budget agreement. The stakes couldn’t have been higher,” Biden said Friday night from the Oval Office. “Nothing would have been more catastrophic than a default on the national debt,” he said.

“Nobody got everything they wanted, but the American people got what they needed,” Biden said, pointing to the “compromise and consensus” in the deal. “We have averted economic crisis and economic collapse.”

Biden took the opportunity to detail the accomplishments of his first term in office as he runs for re-election, including support for high-tech manufacturing, infrastructure investment and financial incentives to fight climate change. He also highlighted ways he blunted Republican efforts to reverse his agenda and push for deeper budget cuts.

“We are cutting spending while reducing deficits at the same time,” Biden said. “We’re protecting key priorities, from Social Security to Medicare to Medicaid to veterans to our transformational investments in infrastructure and clean energy.”

While he promised to continue working with Republicans, Biden also drew contrasts from the opposing side, especially when it comes to raising taxes on the wealthy, something the Democratic president has strived for.

He suggested that it may be necessary to wait for a second term. “I’ll be back,” he said. “With your help I will win.”

‘good of the land’

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

Biden praised McCarthy and his negotiators for acting in good faith, and all congressional leaders for ensuring the legislation passed quickly. “They acted responsibly and put the welfare of the country above politics,” he said.

Overall, the 99-page bill caps spending for the next two years and changes a number of policies, including imposing new job requirements for older Americans receiving food aid and giving the green light to a natural gas pipeline in the Appalachians that many Democrats oppose. are. Some environmental regulations were changed to streamline approvals for infrastructure and energy projects — a move long sought by moderates in Congress.

The Congressional Budget Office estimated that it could actually expand overall eligibility for federal food aid by removing job requirements for veterans, the homeless and youth leaving foster care.

The legislation also boosted funds for defense and veterans, cut some new money for the Internal Revenue Service (IRS), and rejected Biden’s call for Trump-era tax breaks for businesses and the wealthy to be reversed to ease the country’s deficits. help cover.

But the White House said the IRS’s plans to step up enforcement of tax laws for high-income individuals and businesses will continue.

The agreement mandated an automatic 1 percent overall cut on spending programs if Congress failed to pass its annual spending bills — a measure designed to pressure lawmakers from both parties to agree before the end of the fiscal year in September. .

More Democrats than Republicans supported the legislation in both chambers, but both parties were critical of its passage.

In the Senate, the count was 63-36, including 46 Democrats and independents and 17 Republicans in favour, 31 Republicans along with four Democrats, and an independent who consults with the Democrats against.

The vote in the House was 314-117.