With little fanfare and, some might argue, too close for comfort, President Joe Biden signed legislation Saturday that suspends the $31.4T debt ceiling and prevents a potentially disastrous, first-ever national default.
In his first-ever Oval Office primetime address Friday evening, which followed the bill’s passage in Congress, Biden hailed the agreement as a major bipartisan achievement and described the deal as “a crisis averted.”
“No one got everything they wanted, but the American people got what they needed,” Biden said. “Nothing — nothing would have been more irresponsible. Nothing would have been more catastrophic.”
The deal, which remains in effect until 2025, includes $136B in cuts to non-defense discretionary spending, imposes new work requirements on multiple social assistance programs, fast-tracks the energy permitting process, and schedules an end to Biden’s student loan payment moratorium.
The signing followed months of intense and often bitter negotiations that sometimes seemed on the brink of collapse, and just two days before the U.S. Treasury was scheduled to run out of funds.
Once the deal seemed set to pass, Speaker of the House Kevin McCarthy declared victory, touting what he called “the biggest cut in savings this Congress has ever voted for.” Early in the negotiations, McCarthy (R-Calif.) seemed likely to either push the country into default or lose his speakership to a revolt from his party’s far-right flank. That the deal suspends, rather than raises, the debt ceiling allows Republicans to claim that they didn’t technically concede to an increase in the debt limit.
“The big winner, however, is Biden, who prevailed in a standoff that could have sunk the economy—and his reelection chances,” Vanity Fair’s Molly Jong-Fast argued on Thursday. Yet the long-term implications of the compromise for Biden’s political prospects are less clear. As The New Republic’s Alex Shephard observed this week, Biden’s willingness to engage has opened up a “Pandora’s box,” signaling to Republicans that they can hold the debt ceiling hostage and extract even deeper cuts in the future.
“This was a deal negotiated while the extreme MAGA Republicans held the American people hostage,” Progressive Caucus chair Pramila Jayapal (D-Wash.) wrote on Wednesday, defending her “no” vote on the bill. “We must be clear that this hostage-taking is absolutely unacceptable.”