On Saturday, President Joe Biden signed legislation to raise the debt ceiling with two days to spare, preventing a historic default.
It was a low-key ending to a months-long drama that unsettled financial markets at home and abroad and forced nervous pensioners and social service groups to formulate contingency plans if the country couldn’t pay its obligations.
The president signed the measure in secret because to the short deadline confronting national leaders, rather than staging a public ceremony with members from both parties to demonstrate the bipartisanship Biden had emphasized in an Oval Office address on Friday evening.
The Treasury Department warned that the country will run out of currency on Monday, sending shockwaves across the U.S. and worldwide economy.
The Resolute Desk photo was issued by the White House. Biden commended Democratic and Republican congressional leaders for their cooperation in a short remark, contrasting with the debt debate’s earlier rancor.
“No matter how tough our politics gets, we need to see each other not as adversaries, but as fellow Americans,” Biden said in a video statement following the signing. “Stop shouting, lower the temperature, and work together to pursue progress, secure prosperity and keep the promise of America for everybody,” he added.
Republicans refused to lift the borrowing ceiling until Democrats slashed spending. The White House spent weeks negotiating with House Speaker Kevin McCarthy, R-Calif.
The final accord, agreed by the House on Wednesday and the Senate on Thursday, suspends the debt ceiling until 2025—after the next presidential election—and limits federal spending. It sets legislators two-year budget aims to ensure economic stability as the electoral season heats up.
The government can borrow to pay bills by raising the debt ceiling, now $31.4 trillion.
On Friday, Biden gave his first Oval Office speech as president after Congress enacted the measure.
He claimed the deal’s “compromise and consensus” gave the American people what they needed. “We avoided economic collapse and crisis.”
As he seeks reelection, Biden praised his first term’s support for high-tech industry, infrastructure spending, and climate change funding. He also noted how he thwarted Republican efforts to reverse his plan and cut further.
“We’re cutting spending and reducing deficits,” Biden stated. “We’re protecting vital priorities like Social Security, Medicare, Medicaid, veterans, and transformative infrastructure and clean energy investments.”
Biden provided the most detail on the agreement he and his team reached. He kept silent during the high-stakes discussions to allow both parties to negotiate a compromise and lawmakers to vote it to his desk, which infuriated some of his party.
Biden commended McCarthy and his negotiators for good faith and all legislative leaders for fast adoption of the package. “They acted responsibly and put country before politics,” he remarked.
House vote: 314-117.
The 99-page package restricts spending and imposes new job requirements for elderly Americans getting food help and approves an Appalachian natural gas project that many Democrats oppose. Moderates in Congress wanted to speed infrastructure and energy project approvals by changing environmental laws.
The Congressional Budget Office believes that eliminating job restrictions for veterans, homeless persons, and foster youth might increase federal food aid eligibility.
The bill increases defense and veteran funding, reduces some new IRS funding, and rejects Biden’s proposal to take back Trump-era tax advantages on companies and the rich to reduce deficits. The White House said the IRS will continue to enforce tax regulations for high-earners and companies.
The deal requires Congress to pass its yearly spending bills by September or face a 1% decrease to spending programs.
Democrats outnumbered Republicans in both chambers, yet both parties were essential to its success. In the Senate, 46 Democrats and independents and 17 Republicans voted in favor, while 31 Republicans, four Democrats, and one independent who caucuses with Democrats opposed.