President Joe Biden on Saturday to signed into law a bill to suspend the United States’ debt limit for two years, avoiding a potential fiscal catastrophe and raising the national debt by another $4 trillion.
“No one got everything they wanted, but the American people got what they needed,” Biden said in an address from the Oval Office on Friday evening. “We averted an economic crisis, an economic collapse.”
The legislation, which both houses of Congress approved with bipartisan support, was the result of a deal brokered by Biden and House Speaker Kevin McCarthy. However, not all members of Congress were happy with the fiscal agreement.
One of the lawmakers who voted against the bill was Georgia Democrat Nikema Williams, who expressed concern about the spending limits contained in the legislation. Several other Georgia lawmakers from both parties also registered their opposition, citing issues such as new work requirements for food assistance recipients and limitations on Biden’s ability to pause student loan repayments.
Despite these concerns, the vast majority of lawmakers supported the compromise as the best path forward to avoid a debt default. The bill includes language allowing more veterans and people with disabilities to avoid work requirements altogether.
Republican leaders had hoped to use the debt-ceiling negotiations to make deeper cuts to federal spending. The GOP package, known as the “Limit, Save, Grow Act,” was far more aggressive in its approach to reducing the federal deficit than the compromise legislation that passed.
Discretionary spending, including funding for federal rental assistance, grants for low-income schools, research, and domestic law enforcement, was on the chopping block in the Republican plan. Both the Biden-McCarthy deal and the original GOP debt-ceiling legislation also peeled back some of the $80 billion in IRS funding granted under last year’s partisan Inflation Reduction Act.
McCarthy faced significant pushback from some members of his own party over the compromise bill. Many prominent conservatives, including Reps. Chip Roy, R-Texas, and Andrew Clyde, R-Georgia, were outraged that the bill made no attempt to cut government spending.
Despite this opposition, the bill passed the Republican-held House by a vote of 314-117. The legislation will allow the Treasury Department to continue borrowing money to pay the country’s bills until January 2025, when the agreement ends.
The bill also imposes tougher work requirements on able-bodied adult food stamp recipients, halts some funding for new IRS agents, and retrieves about $30 billion in unspent COVID-19 relief money. While these provisions were not as severe as those in the GOP package, they still prompted some lawmakers to vote against the bill.
Critics argued that the bill will limit the ability of the Biden administration to pursue its policy agenda, such as expanding Medicaid coverage and boosting spending on infrastructure. However, supporters of the bill emphasized the need to ensure the stability of the economy and avoid defaulting on the country’s debts.
The Congressional Budget Office warned earlier this year that failing to raise or suspend the debt limit could have severe consequences for the U.S. economy, potentially triggering a recession or even a financial crisis. The bill’s passage should help calm financial markets ahead of Monday’s target date to avoid default.