President Joe Biden took a modest victory lap Friday, marking the end of a monthslong impasse-turned-crisis over the debt limit while also celebrating the bipartisan nature of the solution.
“I know bipartisanship is hard, unity is hard, but we can never stop trying,” Biden said in his first major address from the Oval Office, referring back to his unity-focused inaugural address. “Because in moments like this one – the ones we just faced – where the American economy and the world economy is at risk of collapsing, there’s no other way.”
With his signature, the bill, which passed the House on Wednesday and the Senate on Thursday, will hike the debt ceiling until Jan. 1, 2025 – just days ahead of when the Treasury Department projected the U.S. would run out of money to pay its bills. Biden said he expects to sign the bill on Saturday.
Biden and House Speaker Kevin McCarthy reached a deal days earlier to raise the debt ceiling while imposing spending caps after a prolonged standoff over the issue. While the White House initially refused to negotiate with Republicans, a House-passed bill that hiked the debt ceiling – while taking aim at Democratic priorities, along with new urgency from the Treasury Department to raise the debt limit – brought Biden to the negotiating table. On Saturday, the two leaders announced a deal.
Though the deal allowed the two leaders to save face – and averted a costly default – Biden noted that “no one got everything they wanted,” though he added that “the American people got what they needed.”
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Even so, he also made clear that some Republicans wanted to take things further. And through his negotiations, he kept the bulk of his legislative accomplishments intact, while notching a major win in pushing off another debt ceiling debate until after the 2024 election.
In addition to raising the debt limit, the Fiscal Responsibility Act is expected to cut the deficit by $1.5 trillion over the next decade, according to the Congressional Budget Office, keeping nondefense spending roughly steady in the 2024 budget with a 1% increase in 2025. It also rescinds some IRS funding and claws back unspent coronavirus relief money, among other things. It will also restart student loan repayments this summer, expand work requirements for some federal aid programs and streamline the permitting process for energy projects.
The work requirements component in particular was a sticking point in negotiations and ultimately turned some Democrats off to the legislation this week. On the other side of the aisle, a number of Republicans took issue with the deal as well, saying its cuts weren’t deep enough, while also expressing concern about defense spending.
Some of those defense hawks in the Senate threatened to throw the legislation’s passage before the default deadline into question on Thursday, as lawmakers spent hours skittering back and forth on the Senate floor and between offices to reach an agreement to appease the members.
But the upper chamber ultimately approved the debt ceiling bill late Thursday with impressive speed, sailing through votes on almost a dozen amendments and approving the measure 63-36, while some of those who casted “no” votes waited to do so until the bill’s passage was certain.
A day earlier, the House approved the legislation with enthusiastic support, in a 314-117 vote, even after a vocal revolt from the right flank of the Republican conference. In the end, more Democrats than Republicans supported the measure. But McCarthy still secured the support of a majority of Republicans, in a show of strength, even with the conservative opposition.
Indeed, for McCarthy, the debt ceiling debacle marked a major test – from which he emerged victorious and, so far, unscathed.
Questions have circulated for weeks about whether the California Republican could both raise the debt ceiling and keep his job after the far-right members of his conference, who gained a significant amount of power during the 15-vote speakership battle in January, came into the fight with a long list of demands. Among the concessions gained during the speaker fight was giving one lawmaker alone the ability to call a vote for the speaker’s ouster, making McCarthy’s position particularly precarious. But so far – outside of some grumblings – the speaker appears to be safe.
Biden commended McCarthy on Friday, saying both sides operated in “good faith,” while keeping their word.
Ultimately, the debt limit fight illustrated that the two leaders can find agreement, compelling their sides to work in a bipartisan fashion in a dire position.