With just two days to spare, US President Joe Biden on Saturday signed legislation that lifts the nation’s debt ceiling, averting an unprecedented default on the federal government’s debt.
It was a decidedly low-key denouement to a months-long drama that unnerved financial markets at home and abroad and caused anxious retirees and social service organizations to make contingency plans in case the country was unable to pay all its bills.
Instead of holding a public ceremony with lawmakers from both parties — showcasing the bipartisanship that Biden had cited in an Oval Office address on Friday evening — the president signed the legislation in private in a reflection of the tight deadline facing the nation’s leaders.
Photo: AFP
The US Department of Treasury had warned that the country would start running short of cash today, which would have sent shockwaves through the US and global economies.
In a brief statement, Biden thanked Democratic and Republican congressional leaders for their partnership, a cordial message that contrasted with the rancor that initially characterized the debt debate.
“No matter how tough our politics gets, we need to see each not as adversaries, but as fellow Americans,” Biden said in a video message released after the signing.
He said it was important to “stop shouting, lower the temperature, and work together to pursue progress, secure prosperity and keep the promise of America for everybody.”
The standoff began when Republicans refused to raise the country’s borrowing limit unless Democrats agreed to cut spending. The final agreement, passed by the US House of Representatives on Wednesday and the Senate on Thursday, suspends the debt limit until 2025 and restricts government spending. It gives lawmakers budget targets for the next two years in hopes of assuring fiscal stability as the political season heats up.
Raising the nation’s debt limit, now at US$31.4 trillion, would ensure that the government can borrow to pay debts already incurred.
“No one got everything they wanted, but the American people got what they needed,” Biden said on Friday, highlighting the “compromise and consensus” in the deal. “We averted an economic crisis and an economic collapse.”
In addition to restrictions on spending, the 99-page bill changes some policies, including imposing work requirements for older Americans receiving food aid and allowing an Appalachian natural gas pipeline that many Democrats oppose.
Some environmental rules were modified to help streamline approvals for infrastructure and energy projects — a move long sought by moderates in Congress.
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