Biden: The debt ceiling agreement is a great victory for our economy and the American people
US President Joe Biden announced that he will sign today, Saturday, a measure authorizing an increase in US government borrowing, which removes the “catastrophic” threat of default that has hung over the largest economy in the world, according to Agence France-Presse.
“I will sign tomorrow,” Biden said, addressing the nation from the Oval Office, adding, “Nothing would be more irresponsible and nothing would be more catastrophic” than a default.
And Biden took advantage of his first speech in the Oval Office of his presidency to declare victory after both chambers of Congress approved a bipartisan agreement to raise the debt ceiling, which prevented debt default and economic chaos.
The president praised the Republican and Democratic negotiators and praised House Speaker Kevin McCarthy for working with him to complete the deal, which the two men made just days before the Treasury Department ran out of money to pay the country’s bills, the Los Angeles Times reported.
The bipartisan budget agreement protects my Investing in America agenda, safeguards folks’ health care and retirement security, and protects programs families rely on — from child care to Meals on Wheels. pic.twitter.com/KAAl1RSio2
— President Biden (@POTUS) June 3, 2023
But even as he thanked his political opponents, Biden was quick to point out his disagreement with them. He pointed to previous Republican calls for cuts to Social Security and Medicare, and criticized proposed cuts to Medicaid, clean energy investments and funding for the Internal Revenue Service, which oversees tax collection.
US senators voted in favor of raising the federal debt ceiling Thursday, at the end of painstaking negotiations to ward off the specter of a catastrophic debt default, just four days before the deadline.
Economists have warned that the United States may not be able to pay its bills by Monday, leaving no room for delay in implementing the “Fiscal Responsibility Act” that extends government borrowing authority to 2024 while cutting federal spending.
And the Senate passed the measure that Biden reached with the Republicans by a comfortable majority (63 to 36 votes), the day after its approval in the House of Representatives.
“Nobody gets everything they want in negotiations, but rest assured that this bipartisan agreement is a huge victory for our economy and the American people,” Biden said in a statement posted on social media.
Our bipartisan budget agreement is good news for Americans.No one got everything they wanted – but the American people got what they needed.We averted an economic crisis.We’re cutting spending and bringing deficits down.And we protected my Investing in America agenda .
— President Biden (@POTUS) June 3, 2023
In turn, the leader of the Democratic majority in the Senate, Chuck Schumer, stressed that the country could now “breathe a sigh of relief” after avoiding a “catastrophic” economic collapse.
He continued, “But after the many difficulties it took to reach this stage, it is good for this country that the two parties have finally agreed in order to avoid default.”
The bill, which will now be submitted to Biden for his signature in order to become law, put an end to the debates between the leaders and members of the two parties, which continued to threaten its approval in light of disagreements that continued until the last moments over the details.
Democratic leaders spent months focusing on the chaos that the first default in history would have caused, including the loss of millions of jobs and $15 trillion in family wealth, as well as rising mortgage costs and other forms of leverage.
The events came late Thursday night after a series of failed votes on amendments demanded mainly by Republicans, who at one point threatened to stall the process, to continue through the weekend.
Senators offered 11 amendments to the 99-page text, with many opposing funding levels for projects important to them – from border control and trade with China to taxation and the environment. Consequently, each of these issues called for a vote.
At one point, defense hardliners were unhappy with the Pentagon’s spending cap.
In the end, they accepted its passage after obtaining a pledge to a separate law allocating cash funds to defend Ukraine in the face of the Russian invasion, support US national security interests in the Middle East, and in the face of increasing Chinese hostile moves towards Taiwan.
“As it stands, this bill puts our military at a disadvantage,” said South Carolina Republican Senator Lindsey Graham. “The most significant money we budget each year is that devoted to protecting and defending the United States and our interests.”
The United States spends more money than it collects in taxes, so it borrows money by issuing government bonds, the most reliable investments in the world.
Almost 80 years ago, Representatives put an end to the federal debt that could be accumulated.
“poisons the political atmosphere”
The cap has been raised more than 100 times since then to allow the government to meet its spending commitments, usually without fanfare and with the support of Democrats and Republicans, and now stands at about $31.5 trillion.
Both parties believe that raising the debt ceiling is poisoning the political atmosphere, although they acknowledge that failure to do so will plunge the US economy into recession and lead to turmoil in global markets, with the government unable to pay its debts.
Republicans hoped to use the extension as a weapon against what they see as Democrats overspending ahead of the 2024 presidential election, even though the debt ceiling increase covers only commitments already made by both parties.
Republican House Speaker Kevin McCarthy described the agreement, which he spent weeks negotiating, as a major victory for the conservatives, although it faced criticism from the hard right, who saw it as too concessional in terms of spending cuts.
Washington’s reduced spending limits will soon become law. Next up —> we advance our priorities further in the fight to protect taxpayer money:- Root out wokeness in government- NO new $4 billion FBI building- Secure the border
— Kevin McCarthy (@SpeakerMcCarthy) June 2, 2023
Short of one vote out of the 150 he pledged to win in the House (two-thirds of his caucus) as he battled a right-wing rebellion and needed Democrats’ help to move the bill to the Senate.
As for Biden, he believes that the vote constitutes an important victory for him, as he succeeded in protecting almost all of his internal priorities from the large spending cuts that the Republicans threatened.
“This legislation protects the full confidence and credibility of the United States and preserves our leadership role financially, which is essential to our economic growth and stability,” said Treasury Secretary Janet Yellen.