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President Joe Biden celebrated the successful resolution of a potential government default in his inaugural speech to the nation from the Oval Office on Friday. He expressed relief that a budget agreement had been reached, preventing a crisis that could have negatively impacted the U.S. and global economies.
The bipartisan measure received approval from the Senate on Thursday night, following a late session in the House the previous night. President Biden plans to sign the agreement at the White House on Saturday, just in time to meet the Treasury Department’s deadline.
The agreement, negotiated between Biden and House Speaker Kevin McCarthy, includes some federal spending cuts demanded by Republicans while protecting key Democratic priorities. It extends the debt limit until 2025, after the 2024 presidential election, and provides budget targets for the next two years to ensure fiscal stability during the upcoming political season.
“No one got everything they wanted but the American people got what they needed,” Biden said, highlighting the “compromise and consensus” in the deal. “We averted an economic crisis and an economic collapse.”
“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.”
Biden’s remarks provided the most detailed insight into the compromise agreement he and his staff negotiated. Throughout the high-stakes talks, he chose to remain mostly silent in public to allow both sides to reach a deal and for lawmakers to vote on it.
White House press secretary Karine Jean-Pierre stated that Biden delivered his first address from the Oval Office to ensure that the American people understood the significance of the bipartisan agreement.
Biden commended House Speaker McCarthy and the negotiators for their good faith efforts. He also appreciated the swift passage of the legislation by congressional leaders, emphasizing that they prioritized the country’s well-being over political considerations.
The 99-page bill restricts spending for the next two years and introduces certain policy changes. These include new work requirements for older Americans receiving food aid and approval for an Appalachian natural gas pipeline, despite opposition from many Democrats. The legislation also streamlines infrastructure and energy project approvals by modifying certain environmental rules, a move that moderate members of Congress have long sought.
According to the Congressional Budget Office, the legislation may expand federal food assistance eligibility by eliminating work requirements for veterans, homeless individuals, and young people leaving foster care.
In terms of budget allocation, the legislation increases funds for defense and veterans, reduces new funding for the Internal Revenue Service, and rejects President Biden’s proposal to roll back tax breaks for corporations and the wealthy. However, the IRS’s plans to strengthen tax law enforcement for high-income earners and corporations will proceed.
Additionally, the agreement includes a provision that imposes an automatic 1% spending cut to programs if Congress fails to approve its annual spending bills. This measure aims to pressure lawmakers from both parties to reach a consensus before the end of the fiscal year in September.
Although more Democrats than Republicans supported the legislation in both chambers of Congress, the passage required the involvement of both parties. In the Senate, the vote was 63-36, with 46 Democrats and independents and 17 Republicans in favor, and 31 Republicans, four Democrats, and one independent opposed. The House vote was 314-117.
Overall, the budget agreement represents a crucial step in averting a government default and ensuring financial stability for the nation.
