Biden praises GOP for averting economic collapse by raising US debt limit

In his first Oval Office address on Friday, President Joe Biden announced that raising the US borrowing limit had prevented an “economic collapse.” The bill, which had bipartisan support, was signed into law on Saturday. Biden expressed appreciation for his Republican counterparts’ cooperation, stating that they had “operated in good faith.” Failure to raise the debt ceiling by Monday’s deadline would have resulted in a “catastrophic” default on the US$31.4tn debt.

The Oval Office is typically reserved for speeches addressing significant national crises, such as war or natural disasters. The White House emphasised that Biden’s decision to use this venue highlighted the seriousness of the situation if the debt ceiling had not been raised in time. For weeks, there were doubts about whether a deal would be finalised before the US government ran out of funds on June 5.

The bill, which passed in the Senate with a 63-36 vote on Thursday night after clearing the House of Representatives, suspends the debt limit until January 1, 2025. It also caps non-defence spending and expands work requirements for food and healthcare assistance, among other provisions. Additionally, the legislation increases full funding for the medical care of military veterans, in line with what President Biden had sought.

“They acted responsibly, and put the good of the country ahead of politics,” said Biden, who is running for re-election in 2024. He praised congressional leaders, including Republican Speaker of the House Kevin McCarthy and Republican Senate leader Mitch McConnell.

The independent Congressional Budget Office reported on Tuesday that the legislation would result in US$1.5tn in savings over a decade. Although the bill had broad bipartisan support, some Republicans argued that it did not go far enough with cuts, while some Democrats felt it went too far.