President Joe Biden is expected to sign legislation on Saturday to raise the debt ceiling, just two days before the US Treasury warned that the country will struggle to pay its bills.
The bipartisan measure, approved this week by the House and Senate, eliminates the potential for an unprecedented government default.
“Passing this budget deal is important. The stakes couldn’t be higher,” Biden said from the Oval Office on Friday night. “There is no worse disaster,” he said, than defaulting on the nation’s debt.
The deal was hashed out by Biden and House Speaker Kevin McCarthy, giving Republicans some of their requested federal spending cuts but holding the line on major Democratic priorities. It raised the debt limit until 2025 – after the 2024 presidential election – and gave lawmakers budget targets for the next two years in hopes of ensuring fiscal stability as the political climate heats up. .
“No one got everything they wanted but the American people got what they needed,” Biden said, emphasizing “compromise and consensus” in the deal. “We avoided economic crisis and economic collapse.”
Biden used the opportunity to itemize the accomplishments of his first term in his run for reelection, including support for high-tech manufacturing, infrastructure investment and financial incentives for combating change. in the climate. He also highlighted the ways in which he is undercutting Republican efforts to roll back his agenda and achieve deeper cuts.
“We’re cutting spending and reducing deficits at the same time,” Biden said. “We’re protecting important priorities from Social Security to Medicare to Medicaid to veterans with our transformative investments in infrastructure and clean energy.”
Although he has vowed to continue working with Republicans, Biden has also drawn differences with the opposing party, particularly when it comes to raising taxes on the wealthy, something the Democratic president has sought.
This is something he suggested should wait until the second term.
“I’ll be back,” he said. “With your help, I will win.”
Biden’s comments were the most detailed comments from a Democratic president on the compromise he and his staff negotiated. He has largely remained silent in public during the high-stakes talks, a decision that disappointed some members of his party but was intended to provide space for the two sides to reach an agreement. agreement and for lawmakers to vote on it at his desk.
Biden praised McCarthy and his negotiators for operating in good faith, and all congressional leaders for ensuring quick passage of the law. “They act responsibly, and prioritize the welfare of the country over politics,” he said.
Overall, the 99-page bill freezes spending for the next two years and changes several policies, including imposing new work requirements for older Americans who receive food aid and greenlighting an Appalachian natural gas pipeline opposed by many Democrats. Some environmental rules were changed to help streamline approvals for infrastructure and energy projects — a move long sought by moderates in Congress.
The Congressional Budget Office estimates that it could actually expand general eligibility for federal food assistance, along with removing work requirements for veterans, the homeless and youth leavers. in foster care.
The legislation also bolsters funds for defense and veterans, cuts some new money for the Internal Revenue Service and rejects Biden’s call to restore Trump-era tax breaks to corporations and rich people to help the poor in the country. But the White House said the IRS’s plan to improve enforcement of tax laws for high-income earners and corporations will continue.
The agreement imposes an automatic overall 1% cut in spending programs if Congress fails to approve its annual spending bills – a move designed to pressure lawmakers to two parties to reach a consensus before the end of the fiscal year in September.
In both chambers, more Democrats support the legislation than Republicans, but both parties are critical of its passage. In the Senate the tally is 63-36 including 46 Democrats and independents and 17 Republicans in favor, 31 Republicans along with four Democrats and an independent who caucuses with the Democrats opposed.
The House vote was 314-117.
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AP Congressional Correspondent Lisa Mascaro contributed to this report.