Topline
President Joe Biden signed legislation Saturday to allow the U.S. government to continue accruing debt while imposing caps on federal spending—closing out a chaotic and politically divisive chapter of the 118th Congress that ultimately ended in a bipartisan compromise.
President Joe Biden addresses the nation on averting default from the White House on June 2.
Key Facts
The president’s signature—which comes two days before the federal government was expected to reach its borrowing limit—eliminates the threat of a first-ever government default until 2025 and puts an end to months of partisan bickering.
Biden signed the bill into law after the GOP-controlled House passed the legislation Wednesday and the Democratic-led Senate approved it Thursday, votes that came mostly from Democrats in both chambers, as many Republicans voiced disappointment in the deal.
Biden, who said for months he would not agree to a debt ceiling deal with any other conditions attached, was forced to the negotiating table by House Republicans’ refusal to lift the debt ceiling without other spending cuts and policy priorities.
Key Background
Biden and House Speaker Kevin McCarthy (R-Calif.) announced the deal Sunday after a marathon negotiating session that came as Treasury Secretary Janet Yellen warned the federal government could reach its $31.4 trillion debt limit as soon as June 5, a scenario that could lead to catastrophic financial consequences. The legislation allows the Treasury to circumvent congressional authority over the debt ceiling and continue paying its bills until January 2025. Among the Republican demands included in the legislation, it caps federal spending in fiscal year 2024 at its current level and allows for a 1% increase in fiscal year 2025. The bill also recoups unspent Covid-19 money, reduces new funding for the Internal Revenue Service, lifts a pandemic-era freeze on federal student loan repayments, imposes stricter work requirements for food stamp recipients and includes permits for a contentious natural gas pipeline project.
Chief Critics
Some Republicans who voted against the legislation argued it did not go far enough in cutting government spending and tamping down on the federal deficit, while some opposing Democrats lamented enhanced work requirements for welfare recipients and inclusion of permits for the Mountain Valley Pipeline project. Rep. Dan Bishop (R-N.C.) has suggested he would attempt to oust McCarthy as speaker because the deal did not reduce federal spending to fiscal year 2022 levels, one of the components of the agreement McCarthy made with Bishop and other right-wing lawmakers in exchange for their votes to elect him speaker in January.
Crucial Quote
“No one gets everything they want in a negotiation, but make no mistake: This bipartisan agreement is a big win for our economy and the American people,” Biden said in a statement Thursday after the Senate passed the legislation, echoing sentiment repeatedly expressed by minority and majority leaders in both chambers.
Further Reading
House Passes Bill To Avert Debt Ceiling Crisis (Forbes)
Default Crisis Averted: Senate Passes Debt Ceiling Bill After Months-Long Debate (Forbes)
Right-Wing Lawmaker Pushes To Remove McCarthy As Speaker Over Debt Ceiling Deal (Forbes) the details…
Source: https://www.forbes.com/sites/saradorn/2023/06/03/biden-signs-debt-ceiling-bill-into-law-lifts-borrowing-limit-until-2025/