Biden Set to Sign Budget Deal, Raising the Debt Ceiling

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Biden Set to Sign Bipartisan Budget Deal, Avoiding Debt Ceiling Crisis

President Joe Biden is poised to sign a legislation this Saturday that will raise the debt ceiling, averting a potential financial catastrophe just days before the U.S. Treasury warned of impending bill payment struggles. The bipartisan measure, which received approval from both the House and Senate this week, eliminates the risk of an unprecedented government default.

Addressing the nation from the Oval Office on Friday evening, Biden emphasized the critical nature of passing this budget agreement, stating that “the stakes could not have been higher.” He stressed that defaulting on the country’s debt would have been “catastrophic.” The agreement, negotiated between Biden and House Speaker Kevin McCarthy, incorporates some federal spending cuts demanded by Republicans while safeguarding key Democratic priorities. It extends the debt limit until 2025, well after the 2024 presidential election, and provides legislators with budget targets for the next two years, aiming to ensure fiscal stability as the political climate intensifies.

In his address, Biden underscored the importance of compromise and consensus reflected in the deal, stating that although no one obtained everything they desired, the American people received what they needed. He highlighted achievements from his first term, such as support for high-tech manufacturing, infrastructure investments, and financial incentives for combating climate change. Biden also emphasized his efforts to thwart Republican attempts to roll back his agenda and achieve deeper cuts.

While pledging to continue working with Republicans, Biden drew distinctions between the two parties, particularly regarding raising taxes on the wealthy—an objective that he hinted might need to wait until a potential second term. He expressed confidence in his reelection prospects, asserting, “With your help, I’m going to win.”

Biden’s remarks provided the most detailed insights into the compromise that he and his staff negotiated. During the high-stakes negotiations, he maintained a largely public silence, a deliberate strategy aimed at allowing both sides to reach a deal and enabling lawmakers to pass it through the necessary procedures.

Biden commended McCarthy and his team for their genuine efforts and praised all congressional leaders for ensuring the swift passage of the legislation. He noted that they acted responsibly and prioritized the nation’s welfare over politics.

The 99-page bill, in essence, limits spending for the next two years and introduces certain policy changes. These include implementing new work requirements for older Americans receiving food aid and approving an Appalachian natural gas pipeline that many Democrats oppose. Some environmental regulations have been modified to streamline approvals for infrastructure and energy projects—a move that moderate members of Congress have long sought.

According to the Congressional Budget Office, the legislation could potentially expand eligibility for federal food assistance by removing work requirements for veterans, homeless individuals, and young people transitioning out of foster care. The bill also bolsters funds for defense and veterans, reduces new funding for the Internal Revenue Service, and rejects Biden’s proposal to roll back tax breaks for corporations and the wealthy, which aimed to address the nation’s deficits. However, the White House confirmed that the IRS’s plans to intensify tax law enforcement for high-income earners and corporations would continue.

Furthermore, the agreement includes an automatic 1% cut to spending programs overall if Congress fails to approve its annual spending bills. This measure is intended to encourage lawmakers from both parties to reach a consensus before the fiscal year ends in September.

Although more Democrats than Republicans supported the legislation in both chambers, the cooperation of both parties was crucial for its passage. In the Senate, the vote tally was 63-36, with 46 Democrats and independents and 17 Republicans in favor, while 31 Republicans, along with four Democrats and one independent caucusing with the Democrats, opposed it. In the House, the vote was 314-117.

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