President Biden Signs Bipartisan Debt Ceiling Bill, Preventing Government Default

Washington, D.C. : Biden Signs Bill to Extend Debt Ceiling –  President Joe Biden signed a bill into law that extends the debt ceiling for two years, preventing a potentially disastrous debt default. In his televised address from the Oval Office, Biden emphasized the importance of reaching an agreement on the budget, as failing to do so would have led to the first-ever default on the national debt in the history of the United States.

The bipartisan budget deal passed the Senate with a 63-36 vote and the House with a vote of 314 to 117. The agreement, brokered by Biden and House Speaker Kevin McCarthy, includes spending caps for the next two years and incorporates conservative measures such as reclaiming $28 billion in unspent Covid relief funds. Additionally, it eliminates $1.4 billion in IRS funding and reallocates $20 billion of the $80 billion received through the Inflation Reduction Act to nondefense funding.

Biden Signs Bill to Extend Debt Ceiling

The bill also resumes federal student loan payments that were paused at the beginning of the pandemic and introduces work requirements for individuals up to the age of 55 to receive benefits under programs like the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families. Exceptions are made for veterans and homeless individuals, and the current threshold for eligibility is increased from 50 to 55 years old.

Initially, President Biden took a firm stance, refusing to negotiate with House Speaker Kevin McCarthy over the debt ceiling. Biden insisted on a clean bill without any spending cuts or policy provisions, emphasizing that he would not allow the full faith and credit of the United States to be used as a bargaining chip. However, McCarthy, as the new Republican House speaker, stated that the House would not vote to raise the debt limit without significant budget cuts.

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Tense Negotiations and Looming Deadline: Debt Ceiling Crisis Threatens US Economy

Despite divisions within the GOP, with some hardline Republicans demanding deeper spending cuts and policy changes, McCarthy was able to gather enough support to pass a partisan bill in late April. This bill proposed budget cuts in exchange for raising the debt ceiling. The passage of this bill in the House forced Biden to engage in negotiations, leading to intense discussions over several weeks that culminated in a deal reached at the end of May, just days before the June 5 deadline.Biden Signs Bill to Extend Debt Ceiling

The Treasury Department had been using “extraordinary measures” since January to pay the country’s bills, but Treasury Secretary Janet Yellen had warned that the United States was at risk of breaching the debt ceiling on June 5. In a letter to McCarthy on May 26, Yellen cautioned that the Treasury would not have sufficient resources to meet the government’s obligations if the debt limit was not raised or suspended.

She highlighted the severe hardships it would cause to American families, the potential harm to the country’s global leadership position, and the questions it would raise about the ability to defend national security interests.