Biden signs bill to lift US debt limit

President Joe Biden signed legislation on Saturday, just two days before the deadline, to lift the nation’s debt ceiling and avoid a potentially disastrous default on the federal government’s debt. The signing took place privately at the White House, and the White House issued a statement expressing gratitude to congressional leaders for their partnership in resolving the issue.

The Treasury Department had warned of a cash shortage to pay all bills starting on Monday, which would have had severe repercussions for the US and global economies. The deadlock arose from Republicans’ demand for spending cuts in exchange for raising the borrowing limit, leading to weeks of negotiations between the White House and House Speaker Kevin McCarthy.

The final agreement, passed by the House and Senate, suspends the debt limit until 2025 and includes spending restrictions. It also sets budget targets for the next two years to ensure fiscal stability during the upcoming political season.

Biden emphasized the importance of passing the budget agreement and highlighted the compromise and consensus achieved. He stated that averting an economic crisis and collapse was crucial, underscoring the achievements of his first term and his commitment to protecting priorities like Social Security, Medicare, Medicaid, veterans’ benefits, and investments in infrastructure and clean energy.

While Biden expressed a willingness to continue working with Republicans, he also emphasized the contrasting positions on taxing the wealthy, suggesting that such measures might be pursued in a second term.

The 99-page bill restricts spending, introduces new work requirements for certain recipients of food aid, and includes provisions that modify environmental rules to streamline infrastructure and energy projects. The legislation expands eligibility for federal food assistance but rejects Biden’s proposal to roll back Trump-era tax breaks for corporations and the wealthy. It also imposes an automatic 1 percent spending cut if annual spending bills are not approved by Congress.

The legislation received more support from Democrats than Republicans in both chambers, but members from both parties played critical roles in its passage. The Senate vote was 63-36, with 46 Democrats and independents and 17 Republicans in favor, while the House vote was 314-117.