President Joe Biden has signed a bill to suspend the debt limit for two years into law, averting a first-ever U.S. default and formally bringing an end to a monthslong standoff with House Republicans over the country's borrowing power. 

Biden signed the bill with just two days to spare before Monday's predicted deadline when the country would run out of money to pay its bills on time. 


What You Need To Know

  • President Joe Biden has signed a bill to suspend the debt limit for two years into law, averting a first-ever U.S. default and formally bringing an end to a monthslong standoff with House Republicans over the country's borrowing power

  • The measure suspends the debt limit for two years in exchange for two years of spending caps and other provisions, including clawing back some COVID-19 funds and imposing new work requirements for older Americans receiving food aid

  • Biden called the agreement "critical" while highlighting the bipartisan nature of the agreement: "No one got everything they wanted but the American people got what they needed"

In what appeared to be a nod to the bipartisan nature of the agreement and votes in Congress, the White House thanked the "four corners" of each party's leadership in the House and Senate.

"Thank you to Speaker [Kevin] McCarthy, Leader [Hakeem] Jeffries, Leader [Chuck] Schumer, and Leader [Mitch] McConnell for their partnership," the White House said in a short release.

"I just signed into law a bipartisan budget agreement that prevents a first-ever default while reducing the deficit, safeguarding Social Security, Medicare, and Medicaid, and fulfilling our scared obligation to our veterans," Biden wrote in a Twitter post, which included a video of himself signing the bill. "Now, we continue the work of building the strongest economy in the world."

The measure – which passed the Senate in a 63-36 vote Thursday night after advancing 314-117 in the House one day prior – suspends the debt limit through Jan. 1, 2025, in exchange for two years of spending caps and other provisions, including clawing back some COVID-19 funds and imposing new work requirements for older Americans receiving food aid. It also codifies an end to the freeze on student loan repayments.

In an address to the American people on Friday, President Biden said that the bill to suspend the debt limit is "essential" to continued economic growth – and celebrated that the country "averted an economic crisis and an economic collapse."

Biden, who ran for president on the slogan that "compromise is not a dirty word," also hailed the fact that the agreement was solidly bipartisan.

"When I ran for president, I was told the days of bipartisanship were over," Biden said in his first Oval Office address. "That Democrats, Republicans can no longer work together. But I refused to believe that, because America can never give into that way of thinking.

"The only way American democracy can function is through compromise and consensus," he continued. "And that is what I work to do as your president, to forge bipartisan agreement where it is possible, and where it is needed."

Biden touted his record of signing bipartisan legislation, highlighting certain economic measures like the $1.2 trillion infrsastructure bill and his bill to boost domestic semiconductor manufacturing. The president said that the recently passed budget bill is "vital" to his economic agenda.

"It's essential to all the progress we’ve made in the last few years is keeping the full, faith, and credit of the United States and passing a budget that continues to grow our economy and reflects our values as a nation," Biden said, hours after the release of a promising May jobs report.

"That’s why I’m speaking to you tonight," he continued. "To report on a crisis averted and what we are doing to protect America’s future. Passing this budget agreement was critical."

"The stakes could not have been higher," Biden warned. "There were extreme voices threatening to take America for the first time in our 247-year history into default on our national debt. Nothing, nothing would have been more irresponsible. Nothing would have been more catastrophic.

Biden warned that a default would have likely thrown the economy into a recession, resulting in millions of jobs lost and impacted the country's economic standing on the world stage.

"So it was critical to reach an agreement," Biden said. "And it's very good news for the American people."

Biden said in his remarks that he will sign the measure, known as the Fiscal Responsibility Act, into law on Saturday. The bill was the result of weeks of negotiations between the president and House Speaker Kevin McCarthy, R-Calif. 

House Republicans in the majority had initially demanded steep spending cuts in exchange for any bill to raise the debt limit, while Democrats and the White House refused to compromise on the country’s obligations and called for the debt ceiling to be lifted without conditions.

But as the threat of a first-ever U.S. default grew closer, the two sides buckled down and came to a consensus on the bill, drawing the ire of some progressives and conservatives alike.

Republicans had initially demanded steep spending cuts in exchange for any bill to raise the debt limit, while Democrats and the White House refused to compromise on the country’s obligations and called for the debt ceiling to be lifted without conditions.

Biden – who ran for office as a consensus-builder, often saying on the campaign trail that "compromise is not a dirty word" – highlighted the bipartisan nature of the vote, as well as the necessity of avoiding default, which experts warn would roil global financial markets. 

"No one got everything they wanted, but the American people got what they needed," Biden said. "We averted an economic crisis and an economic collapse.

"We're cutting spending and bringing the deficits down at the same time," the president continued. "We're protecting important priorities from Social Security to Medicare, to Medicaid, to veterans to our transformational investments and infrastructure in clean energy."

The president went on to praise Speaker McCarthy for his role in the negotiations, saying that both sides operated in good faith to reach a consensus.

"He and I, we and our teams were able to get along get things done," Biden said. "We were straightforward to one another, completely honest with one another, respectful with one another. Both sides operated in good faith. Both sides kept their word."

Biden also extolled Senate Majority Leader Chuck Schumer, D-N.Y., Minority Leader Mitch McConnell, R-Ky., and House Democratic Leader Hakeem Jeffries, D-N.Y., saying that everyone involved "acted responsibly and put the good of the country ahead of politics."

"A final vote in both chambers was overwhelming," he said. "Far more bipartisan than anyone felt was possible."

Despite his championing of bipartisanship, Biden also took aim at Republicans' initial debt limit proposal, while touting his proposals to "do even more to reduce the deficit" by raising taxes on the wealthiest Americans and corporations.

"Republicans may not like it, but I'm gonna make sure the wealthy pay their fair share," the president said.

But as he concluded his remarks, the president made an appeal to unity.

"I know bipartisanship is hard, and unity is hard," Biden said. "But we can never stop trying. Because the moments like this one, the ones we just faced, where the American economy and the world economy is at risk of collapsing. There's no other way.

"No matter how tough our politics gets, we need to see each other not as adversaries, but as fellow Americans," Biden continued. "Treat each other with dignity and respect. To join forces as Americans to stop shouting, lower the temperature and work together to pursue progress, secure prosperity and keep the promise of America for everybody.

"I can honestly say that I've never been more optimistic about America's future," he concluded. "We just need to remember who we are. We are the United States of America. And there's nothing nothing we can't do when we do it together."