President Joe Biden defended a debt limit deal he struck with Republicans as necessary to prevent an “economic collapse” and said he would sign it on Saturday amid frustration from many lawmakers in both parties who backed the agreement reluctantly.
“No one got everything they wanted but the American people got what they needed. We averted an economic crisis and an economic collapse,” Biden said Friday in a national address from the Oval Office, touting it as a bipartisan accomplishment.
The deal Biden crafted with House Speaker Kevin McCarthy avoided the country’s first-ever debt default, which would have had disastrous consequences for the US and global economies. The two agreed to suspend the debt limit until Jan. 1, 2025, in exchange for curbs on government spending.
“The stakes could not have been higher. 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,” Biden said. “Nothing would have been more irresponsible. Nothing would have been more catastrophic. Our economy would have been thrown into recession.”
Biden commended McCarthy for helping to craft the deal.
“When I ran for president, I was told the days of bipartisanship were over, that Democrats and Republicans could no longer work together. But I refused to believe that. Because America can never give in to that way of thinking,” he said.
The agreement is projected to cut federal deficits by about $1.5 trillion over a decade, according to the nonpartisan Congressional Budget Office.
“We’re cutting spending and the bringing deficits down at the same time. We’re protecting important priorities from Social Security to Medicare to Medicaid to veterans to our transformational investments in infrastructure and clean energy,” Biden said.
Friday’s address marked the president’s most expansive remarks on the debt ceiling since negotiations accelerated. Biden had said little publicly about the talks, which frustrated some of his Democratic allies but likely helped create an environment that allowed both sides to compromise.
The deal was only finalized after months of contentious back-and-forth between Biden and McCarthy. Negotiators raced to craft an agreement before June 5, the date Treasury Secretary Janet Yellen had said the US would run out of cash to pay its bills by if Congress did not raise or suspend the borrowing limit.
The House passed the measure on Wednesday and it was approved by the Senate a day later. The Treasury Department signaled that a weekend signing provides enough time to keep payments flowing.
The deal contains victories for both sides. It delays another partisan standoff over the debt limit until after the 2024 election, when Biden is seeking a second term, and left the president’s first-term legislative achievements untouched.
It changed the trajectory on federal spending, capping funding for defense and domestic programs for two years, while easing permitting rules for some energy and infrastructure projects and clawing back some funding for Internal Revenue Service agents and Covid-19 relief.
Still, many lawmakers on the right and left criticized its terms, and some who supported it said they voted for it reluctantly. House conservatives said the spending cuts did not go far enough, while some Senate Republicans balked at limits on defense spending.
Progressives criticized new work requirements for older Americans receiving food assistance and the approval of the Mountain Valley natural gas pipeline.
