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With just two days to spare, President Joe Biden signed legislation on Saturday that lifts the nation’s debt ceiling, averting an unprecedented default on the federal government’s debt.
It was a decidedly low-key denouement to a monthslong drama that unnerved financial markets at home and abroad and caused anxious retirees and social service organization to make contingency plans in case the country was unable to pay all its bills.
Instead of holding a public ceremony with lawmakers from both parties — showcasing the bipartisanship that Biden had cited in an Oval Office address on Friday evening — the president signed the legislation in private in a reflection of the tight deadline facing the nation’s leaders.
The Treasury Department had warned that the country would start running short of cash on Monday, which would have sent shockwaves through the U.S. and global economies.
The White House released a picture of the president signing the legislation at the Resolute Desk. In a brief statement, Biden thanked Democratic and Republican congressional leaders for their partnership, a cordial message that contrasted with the rancor that initially characterized the debt debate.
The standoff began when Republicans refused to raise the country’s borrowing limit unless Democrats agreed to cut spending. Eventually, the White House began weeks of intense negotiations with House Speaker Kevin McCarthy, R-Calif., to reach a deal.
The final agreement, passed by the House on Wednesday and the Senate on Thursday, suspends the debt limit until 2025 — after the next presidential election — and restricts government spending. It gives lawmakers budget targets for the next two years in hopes of assuring fiscal stability as the political season heats up.
