With just two days to spare, President Joe Biden has signed legislation that lifts the nation’s debt ceiling. That averts an unprecedented default on the federal government’s debt. The Treasury Department had warned that the country would start running short of cash to pay all of its bills on Monday, a development that would have sent shockwaves through the U.S. and global economies. Republicans refused to raise the country’s borrowing limit unless Democrats agreed to cut spending, leading to a standoff that wasn’t resolved until weeks of intense negotiations between the White House and House Speaker Kevin McCarthy. The final agreement suspends the debt limit until 2025 — after the next presidential election — and restricts government spending.
Republicans refused to raise the country's borrowing limit unless Democrats agreed to cut spending, leading to a standoff that was not resolved until weeks of intense negotiations between the White House and House Speaker Kevin McCarthy, R-Calif.
The bipartisan measure, passed by the House on Wednesday and the Senate on Thursday, averts the potential of an unprecedented government default that would have rocked the U.S. and global economies. Raising the nation’s debt limit, now at $31.4 trillion, will ensure that the government can borrow to pay debts already incurred.
“No one got everything they wanted but the American people got what they needed,” Biden said, highlighting the “compromise and consensus” in the deal. “We averted an economic crisis and an economic collapse.” Even as he pledged to continue working with Republicans, Biden also drew contrasts with the opposing party, particularly when it comes to raising taxes on the wealthy, something the Democratic president has sought.“I’m going to be coming back,” he said. “With your help, I’m going to win.”
Overall, the 99-page bill restricts spending for the next two years and 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.
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