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President Joe Biden signed into law Saturday a bill to suspend the nation’s debt limit through January 1, 2025, to avert a first-ever US default.
Biden signed H.R. 3746, the “Fiscal Responsibility Act of 2023,” two days before Monday’s default deadline, on which the U.S. would run out of cash to pay its bills, according to a White House release.
“I just signed into law a bipartisan budget agreement that prevents a first-ever default while reducing the deficit, safeguarding Social Security, Medicare, and Medicaid, and fulfilling our scared obligation to our veterans,” Biden said in a tweet, which was accompanied by a short video of him signing the bill. “Now, we continue the work of building the strongest economy in the world,” the president added.
The suspension of the debt limit until early 2025 eliminates the risk of default until after the next presidential election. The legislation not only addresses the debt limit issue but also includes provisions such as capping nondefense spending, introducing stricter work requirements for some food stamp recipients, and reclaiming certain COVID-19 relief funds.
The bipartisan deal to handle the debt limit was reached through negotiations between the White House and House Republicans. These negotiations were challenging and intense, with moments where a breakdown seemed imminent. However, lawmakers successfully managed to pass the bill before the June 5 deadline set by the Treasury Department. This deadline marked the point at which the government might have been unable to fulfill its financial obligations, potentially triggering a global economic crisis.
Passing the bill through Congress within such a tight timeframe placed significant pressure on both party leaders. Nevertheless, the House approved the bill on Wednesday, and the Senate followed suit on Thursday.
Although the deal faced criticism from both ends of the political spectrum, it ultimately gained support from a wide range of lawmakers across parties, including many moderates.
