President Joe Biden promoted the recent debt ceiling agreement that prevented a historic U.S. default in his first-ever address to the nation from the Oval Office on June 2. He said he would sign the bill into law on Saturday.
Biden began his address by highlighting the significance of the deal he reached with House Speaker Kevin McCarthy (R-Calif.).
“Passing this budget agreement was critical. The stakes could not have been higher,” Biden said.
“There were extreme voices threatening to take America for the first time in our 247 year history,” Biden added. “Nothing, nothing would have been more irresponsible. Nothing would have been more catastrophic.”
Biden noted that neither side in the negotiations received everything they wanted but that the American people ultimately won.
“We averted an economic crisis and economic collapse.”
During his first address to the nation from the Oval Office, Biden highlighted his legislative wins and said he protected important priorities such as Social Security, Medicare, veterans’ benefits, infrastructure, and clean energy investments.
Biden said that he would continue to prioritize raising revenue by increasing taxes, going after tax evaders, and ensuring that everyone pays their fair share.
How Negotiations Began
In January, Treasury Secretary Janet Yellen informed Congress that the United States would soon surpass its $31.4 trillion debt ceiling. Yellen stated that this could be delayed until June.House Speaker Kevin McCarthy (R-Calif.) demanded that the White House reduce spending in exchange for raising the limit. Biden, however, refused to negotiate, saying it would put the “full faith and credit of the United States” at risk.
Biden presented his budget proposal for 2024 on March 9 and requested that House Republicans do the same.
The impasse was broken on April 26 when House Republicans passed the Limit, Save, Grow Act, which included an increase in the debt ceiling as well as spending cuts that reflected Republican priorities.
The Bill
The Financial Responsibility Act suspends the debt ceiling until Jan. 1, 2025, slightly reduces non-defense discretionary spending in 2024, and caps discretionary spending growth at 1 percent in 2025.The deal also includes oil and gas drilling permitting reforms, revisions to work requirements for some social welfare programs, and clawbacks of $20 billion in IRS funding and $30 billion in unspent COVID-19 relief funds.
In the absence of congressional action to allow additional borrowing, Yellen recently warned that the federal government will run out of money on June 5.
The bill was approved by the House on May 31 by a bipartisan vote of 314 to 117, and it cleared the Senate on June 1 by a bipartisan vote of 63 to 36.
McCarthy referred to the bill as historic, calling it the largest spending cut ever passed by Congress. After the bill cleared the Senate on June 1, Senate Majority Leader Chuck Schumer (D-N.Y.) said, “We have saved the country from the scourge of default.”
Compromise: No One Loves It
As a result of compromises, many lawmakers have raised issues with the bill until it was finally able to pass both the House and the Senate.“I think what we have is a compromise that doesn’t have what everybody wants,” Sen. Jeanne Shaheen (D-N.H.) told The Epoch Times on June 1. “But that’s what governing is about. It’s about making compromises.”
“Is it everything I wanted? No. But sitting with one House with a Democratic Senate and a Democratic president who didn’t want to meet with us, I think we did pretty dang good for the American public,” McCarthy said in a May 31 news conference.
“It is not a perfect bill, but it does represent a compromise between the administration and Congress. That’s necessary in a divided government. Nobody got everything they wanted. But the end result is a truly historic bill,” Rep. Tom Cole (R-Okla.) said.
Cole, who voted yes for the bill, told The Epoch Times after the passage that the package represented the “best deal we could have cut” and praised McCarthy’s leadership for striking the compromise agreement, calling the speaker a “master of the art of the possible.”
Rep. Greg Landsman (D-Ohio) simply said, “The bill represents the fact that the Congress is divided.”
Opposition
Conservatives and progressives comprised the majority of the opposition in the House (71 Republicans and 46 Democrats).Approximately half of the 71 Republican “no” votes were cast by members of the House Freedom Caucus.
“Speaker McCarthy had a mandate from the American people with a powerful negotiation position of a unified Republican party … to hold the line for the bill that we passed,” Rep. Scott Perry (R-Pa.), chairman of the Freedom Caucus, said at a May 30 press conference.
Perry said the bipartisan deal negotiated by McCarthy “totally fails to deliver.”
“The Republican conference right now has been torn asunder and we are working hard to try to put it back together again this weekend by making sure that this bill gets stopped,” Rep. Chip Roy (R-Texas) said on May 30.
In the Senate, 31 Republicans voted against the bill, along with four Democrats and one independent.
“At a time of massive inequality and when the people on top have never had it so good, I cannot in good conscience vote for a bill that hurts working people,” Sen. Bernie Sanders (I-Vt.) said while debating the bill on June 1.
