'Crisis averted': Biden to sign debt ceiling bill to avert default

The 99-page bill reins in spending for the next two years and suspends the debt limit until January 2025.
Posted at 9:33 PM, Jun 02, 2023

President Joe Biden commemorated a "crisis averted" Friday night in an address to the nation from the Oval Office. The President said he's ready to sign the bipartisan budget agreement Saturday to suspend the nation's debt ceiling and eliminate what could've been the first-ever government default. 

"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."

H.R. 3746 — the Fiscal Responsibility Act — passed the House Wednesday with bipartisan support and a final vote tally of 314 -117. It gained approval by the Senate one day later with a vote of 63-36.

Overall, the 99-page bill reins in spending for the next two years and will suspend the debt limit until January 2025. It will also change some policies, including adding new work requirements for Americans receiving food aid and approval of an Appalachian natural gas pipeline, something many Democrats were against.

"I know bipartisanship is hard," Biden said. "And unity is hard. But we can never stop trying."

He also praised House Speaker Kevin McCarthy and his negotiators for convincing their Republican colleagues to swiftly approve the bill just days before the U.S. was set to run out of money to pay its bills.

House Speaker Kevin McCarthy of California speaks.

How Biden and McCarthy struck a debt-limit deal

It was crucial for President Joe Biden and House Speaker Kevin McCarthy's negotiators to work out an agreement to avoid a default.


"The Fiscal Responsibility Act does what is responsible for our children, what is possible in divided government, and what is required by our principles and promises. Only because of Republicans' resolve did we achieve this transformative change to how Washington operates," McCarthy said.

One major win for the White House was preserving the status quo for Medicaid recipients. McCarthy’s plan called on Medicaid recipients ages 19–55 to perform 80 hours of "community engagement" a month, such as work or volunteer requirements. 

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

The Biden administration was also pleased that Republicans would not try to make student loan borrowers pay back interest over the last three years as payments were paused due to COVID-19.

The deal holds non-defense spending roughly flat in 2024, increasing it by only 1% in 2024.