WASHINGTON (CN) — After weeks of negotiations, President Joe Biden will sign a bipartisan deal to raise the federal government’s self-imposed debt ceiling, averting a national default.
In a primetime address on Friday, Biden called the agreement “critical.”
“The stakes could not have been higher,” he said.
The measure, which suspends the government’s self-imposed debt limit for a period of two years while implementing a litany of federal spending caps, cleared the House on Wednesday and the Senate on Thursday.
“The American people won here,” White House press secretary Karine Jean-Pierre said at a briefing Friday. “We were able to come together and deliver for American families.”
Biden will sign the bill on Saturday.
The Treasury Department said the nation would reach the ceiling by Monday, when it would run out of money to pay its obligations. The vast majority of other countries do not run their government in a similar fashion, with Denmark being the only compatriot to the U.S. system.
Congress has voted to raise the debt ceiling dozens of times. Failing to do so would have had severe economic consequences and damaged U.S. credibility worldwide.
The White House and House Republicans have been negotiating over several policy differences, including government spending and work requirements for federal programs. The final compromise irked lawmakers in the conservative and progressive wings of both parties.
“No one got everything they wanted but the American people got what they needed. We averted an economic crisis and an economic collapse,” Biden said.
One particularly irked Democrat was Virginia Senator Tim Kaine, who strongly criticized the White House for including a provision to fast-track the controversial Mountain Valley Pipeline. He introduced an amendment to remove the provision, but it did not pass.
“I think it’s frankly an outrageous giveaway that is unjustified and nearly unprecedented in what Congress can do,” Kaine, who ultimately voted in favor of the debt deal, said in a conference call with reporters.
On Biden’s view of the project, Jean-Pierre said, “There’s nothing new here as it relates to this particular project.”
The deal not only increases the government’s self-imposed spending limit but also implements some budget constraints, including pulling back unused funding for federal Covid-19 programs. The measure also incorporates a major Republican demand — increasing work requirements for some older Americans receiving federal aid.
The agreement cuts spending by $1.5 trillion over the next 10 years, according to a Congressional Budget Office analysis.
Biden touted the deal for excluding changes to Social Security, Medicare and Medicaid.
“Our work is far from finished, but this agreement is a critical step forward, and a reminder of what’s possible when we act in the best interests of our country,” he said.
The deal didn’t make any changes to the debt ceiling structure, essentially setting up a similar situation in 2025 when lawmakers wait until the last minute while trying to advance a variety of policies.
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