WASHINGTON (AP) – With just two days to spare, United States (US) President Joe Biden signed legislation on Saturday that lifts the nation’s debt ceiling, averting an unprecedented default on the federal government’s debt.
Instead of holding a public ceremony with lawmakers from both parties – showcasing the bipartisanship that Biden had cited in an Oval Office address on Friday – the president signed the legislation in private in a reflection of the tight deadline facing the nation’s leaders.
The Treasury Department warned that the country would start running short of cash today, which would have sent shockwaves through the US and global economies.
The White House released a picture of the president signing the legislation. In a brief statement, Biden thanked Democratic and Republican congressional leaders for their partnership.
“No matter how tough our politics gets, we need to see each not as adversaries, but as fellow Americans,” Biden said in a video message released after the signing.
He said it was important to “stop shouting, lower the temperature, and work together to pursue progress, secure prosperity and keep the promise of America for everybody”.
The standoff began when Republicans refused to raise the country’s borrowing limit unless Democrats agreed to cut spending. Eventually, the White House began weeks of intense negotiations with House Speaker Kevin McCarthy, R-California, to reach a deal.
The final agreement, passed by the House last Wednesday and the Senate last Thursday, suspends the debt limit until 2025 – after the next presidential election – and restricts government spending.
It gives lawmakers budget targets for the next two years in hopes of assuring fiscal stability as the political season heats up.
Raising the nation’s debt limit, now at USD31.4 trillion, will ensure that the government can borrow to pay debts already incurred.
After Congress passed the legislation, Biden used the occasion to deliver his first speech from the Oval Office as president on Friday.
“No one got everything they wanted but the American people got what they needed,” he said, highlighting the “compromise and consensus” in the deal.
“We averted an economic crisis and an economic collapse.”
Biden touted the achievements of his first term as he runs for reelection, including support for high-tech manufacturing, infrastructure investments and financial incentives for fighting climate change. He also highlighted ways he blunted Republican efforts to roll back his agenda and achieve deeper cuts.
Biden’s remarks were the most detailed comments from the Democratic president on the compromise he and his staff negotiated. He largely remained quiet publicly during the high-stakes talks.
In addition to restrictions on spending, the 99-page bill changes some policies, including imposing new work requirements for older Americans receiving food aid and greenlighting an Appalachian natural gas pipeline that many Democrats oppose.
Some environmental rules were modified to help streamline approvals for infrastructure and energy projects – a move long sought by moderates in Congress.
In both chambers, more Democrats backed the legislation than Republicans, but both parties were critical to its passage.
