Joe Biden celebrated Congress’s approval of a debt-ceiling suspension in a speech delivered from the Oval Office on Friday night, a day after the Senate passed the compromise bill brokered by the president and the Republican House speaker, Kevin McCarthy.
Biden described the bill’s enactment as “essential to the progress we’ve made over the last few years” in “keeping full faith and credit of the United States of America and passing a budget that continues to grow our economy and reflects our values as a nation”.
“That’s why I’m speaking to you tonight: to report on a crisis averted and what we’re doing to protect America’s future,” Biden said.
Biden said he would sign the bill Saturday, with just two days left before the 5 June default deadline. Once enacted, the law will suspend the government’s borrowing limit until January 2025, ensuring the issue will not resurface before the next presidential election.
The speech, which marked Biden’s first formal address from the Oval Office, came less than 24 hours after the Senate passed the debt ceiling bill in a bipartisan vote of 63 to 36. A day earlier, the bill had passed the Republican-controlled House in a bipartisan vote of 314 to 117.
The signing of the bill will avert the first federal default in US history, which could have upended the American economy and global markets. Economists have warned that a federal default could cause the US unemployment rate to double while significantly damaging America’s gross domestic product (GDP).
“Passing this budget agreement was critical. The stakes could not have been higher,” Biden said. “If we had failed to reach an agreement on the budget, there were extreme voices threatening to take America, for the first time in our 247-year history, into default on our national debt. Nothing, nothing would have been more irresponsible. Nothing would have been more catastrophic. Our economy would have been thrown in recession.”
But the passage of the bill came with some significant drawbacks for Biden and fellow Democrats. Although Biden spent months insisting that Congress must pass a “clean” debt ceiling bill with no strings attached, he was ultimately forced to the negotiating table with McCarthy after House Republicans passed their own debt ceiling bill in late April.
As part of his negotiations with McCarthy, Biden agreed to some spending cuts and new work requirements for benefits programs. Those policies were denounced by progressives in Congress, many of whom opposed the debt ceiling bill in protest.
“I could not in good conscience vote for a bill that cuts programs for the most vulnerable while refusing to ask billionaires to pay a penny more in taxes,” Senator Bernie Sanders of Vermont, one of the deal’s critics, wrote in a Guardian op-ed published Friday.
“Deficit reduction cannot just be about cutting programs that working families, the children, the sick, the elderly and the poor depend upon
However, the spending cuts included in the final version of the bill were much more modest than those outlined in the original proposal passed by House Republicans, a point that Biden emphasized in his Friday speech.
“No one got everything they wanted, but the American people got what they needed,” Biden said. “We averted an economic crisis, an economic collapse. We’re cutting spending and bringing the deficits down at the same time. We’re protecting important priorities – from Social Security to Medicare to veterans to our transformational investments in infrastructure and clean energy.”
But the compromise struck many hard-right Republicans in Congress as a raw deal, and they voted against the debt ceiling bill over concerns that the legislation did not go far enough to tackle the federal debt of more than $31tn. Those Republicans’ efforts to block the legislation from advancing repeatedly failed, clearing the way for the final Senate passage of the bill on Thursday.
As the US breathes a sigh of relief over avoiding a potentially catastrophic default, lawmakers are already bracing for future fights. Some progressives, including Sanders, have called on Biden to eliminate the debt ceiling by invoking the 14th amendment of the constitution, which stipulates that the validity of the public debt of America “shall not be questioned”. Such a policy maneuver would kill any future threat of a default.
“The fact of the matter is that this bill was totally unnecessary,” Sanders wrote in his op-ed. “I look forward to the day when [Biden] exercises this authority and puts an end, once and for all, to the outrageous actions of the extreme right wing to hold our entire economy hostage in order to protect their corporate sponsors.”