WASHINGTON (AP) — President Joe Biden is expected to sign legislation Saturday to raise the debt ceiling, dodging Monday’s deadline when the Treasury warned the United States would run out of cash to pay all its bills.
The bipartisan measure, passed by the House of Representatives on Wednesday and the Senate on Thursday, averts the potential of an unprecedented government bankruptcy that would have rocked the US and the global economy. 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,” he said, than to default on the national debt.
The deal was brokered by Biden and House Speaker Kevin McCarthy, giving Republicans some of their requested federal cuts but sticking to major Democratic priorities. It raises the debt limit to 2025 — after the 2024 presidential election — and gives lawmakers budget targets for the next two years in hopes of ensuring fiscal stability as the political season heats up.
“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 list the achievements of his first term in office as he runs for re-election, including support for high-tech manufacturing, infrastructure investments and financial incentives to fight climate change. He also highlighted how 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.
It’s something he suggested might need to wait until a second term.
“I’ll be back,” he said. “With your help I will win.”
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 limits 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 estimates it could actually expand overall eligibility for federal food aid, by eliminating job requirements for veterans, the homeless and youth leaving foster care.
The legislation also supports defense and veterans funds, cuts some new money for the Internal Revenue Service and rejects Biden’s call to reverse Trump-era tax breaks for corporations and the wealthy to help the country’s deficits 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 imposes an automatic 1% blanket cut on spending programs if Congress fails to pass its annual spending bills — a measure designed to pressure lawmakers from both parties to reach a deal 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.
AP Congressional Correspondent Lisa Mascaro contributed to this report.
