By Jonathan Mason–June 4th 2023.
President Joe Biden signed legislation on Saturday–just two days before the default deadline– that raises the debt ceiling of the United States and avoids a default on the debt of the US federal government.
The White House announced the signing, done in private without press at the White House, in an emailed statement in which Biden thanked congressional leaders for their part in the deal.
The US Treasury had warned that the country would start running short of cash to pay all of its bills on Monday, which would have had profound consequences on the U.S. and other global economies.
Republicans refused to raise the country’s borrowing limit unless Democrats agreed to cut spending, leading to a standoff that was not resolved until weeks of negotiations between the White House and House Speaker Kevin McCarthy, R-Calif, which removed Biden’s pricey student loan relief program from the budget.
The final agreement, passed by the House on Wednesday and the Senate on Thursday, suspends the debt limit until 2025 — after the next presidential election — 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 $31.4 trillion, will ensure that the government can borrow to pay debts already incurred. for example paying federal employees, Social Security for retirees and the disabled, and Medicare, the health insurance program for older people and the disabled.
“We’re cutting spending and bringing deficits down at the same time,” Biden said. “We’re protecting important priorities from Social Security to Medicare to Medicaid to veterans to our transformational investments in infrastructure and clean energy.”
