President Joe Biden took action on Saturday by signing the bipartisan debt ceiling bill, effectively averting an imminent economic default that was looming just days away. This decision comes as a relief to many who were concerned about the potential consequences of reaching the debt limit.
The president and House Speaker Kevin McCarthy were engaged in negotiations for weeks on how to reach a bipartisan agreement on raising the debt ceiling with Republican demands to include spending cuts. Without a raise to the debt ceiling, the federal government would have run out of money on June 5, Treasury Secretary Janet Yellen warned.
The negotiating parties for Biden and McCarthy came to a consensus May 27 and the House passed the Fiscal Responsibility Act Wednesday night. The Senate passed the bill Thursday night and sent it along to the president’s desk to be signed into law.
The bill allows the federal government to take out unlimited debt through Jan. 1, 2025. Republicans were able to push for capping non-defense discretionary spending at Fiscal Year 2022 levels for Fiscal Year 2024. The bill also claws back $28 billion in unspent COVID-19 stimulus funds and cuts $1.4 billion in IRS funding.
The president has touted the bill as a win for the “economy and the American people,” admitting “no one gets everything they want in a negotiation.”
