US President Joe Biden signed the debt ceiling bill passed by Congress into law on Saturday.
Washington:
US President Joe Biden signed into law on Saturday a debt ceiling bill passed by Congress after weeks of wrangling to avert a catastrophic, self-inflicted default in the world’s largest economy.
The Fiscal Responsibility Act of 2023 authorizes the government to expand the so-called debt ceiling to borrow while paying the bills. The Treasury warned that if the debt ceiling was blocked beyond Monday, the country would default on its $31 trillion debt.
A default would likely cause market panic, huge job losses and a recession, with global ramifications.
In a statement on Saturday, the White House thanked Republican and Democratic leaders in Congress “for their partnership”.
In a rare Oval Office address late Friday, Biden said the debt ceiling bill saved the country from “economic collapse.”
Speaking from behind the historic Resolute Desk on live primetime television, Biden said the deal that resolved the impasse between Democrats and Republicans was a compromise where “no one got everything they wanted.”
However, “we averted an economic crisis,” he said.
Oval Office addresses have always been reserved by presidents for moments of unique national danger or importance.
Biden used the occasion to project a confident, calm tone. Sprinkling his speech with laughter and smiles, he praised his opponents for speaking in good faith and promised Americans that he had never felt more optimistic.
Biden said Congress now preserved “the full faith and credit of the United States of America”.
But despite the House and Senate overcoming differences to finally ratify the deal last week, the reputation of the US economy took a hit.
Ratings agency Fitch said on Friday it was keeping the United States’ “AAA” credit rating on negative watch despite the deal.
– Reaching Opponents –
The debt ceiling is a controversial accounting maneuver typically approved annually by Congress. It allows the government to borrow money to pay for bills it has already incurred.
This year, hard-right Republicans who dominate their party’s narrow majority in the House of Representatives decided to use the must-pass vote to force Biden to accept cuts to several Democratic spending priorities.
It launched a test of political strength that threatened to end in chaos, before the two sides agreed this week to raise the debt ceiling, while in return freezing some budgetary spending – yet to be cut Republican demands stopped just short.
Kevin McCarthy, speaker of the Republican-led House, touted the compromise bill as a major victory for conservatives, though he faced opposition from right-wing hardliners who said he made too many concessions.
But Biden, who is campaigning for re-election in 2024, sees the dramatic resolution of the crisis as a victory, showcasing his negotiating powers and his pitch as a moderate voice in an increasingly extreme political landscape. We do.
He lit up those credentials in the speech, going out of his way to praise McCarthy, a longtime loyalist to former President Donald Trump – the man Joe Biden defeated in 2020 and who is seeking his comeback in 2024.
Biden said, “I want to commend Speaker McCarthy. You know, he and I, we and our teams, were able to get the job done.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)