Biden highlights commitment to avoid non-compliance in speech from the Oval Office

After weeks of difficult negotiations, President Joe Biden highlighted his ability to achieve a bipartisan compromise with Republicans, an issue he will return to in his 2024 re-election campaign, in remarks Friday night on the passage of the Act. of Fiscal Responsibility.

The move suspends the US government’s debt limit until early January 2025 and prevents a potentially disastrous default just days before the government runs out of cash to pay its bills.

“Essential to all the progress we’ve made in recent years is keeping the faith and credit of the United States and passing a budget that continues to grow our economy and reflects our values ​​as a nation,” he said from the Oval Office.

Biden said passing the bill was critical. “The stakes could not have been higher.”

Highlighting the bipartisan legislative achievements made during his administration, Biden stressed that the only way American democracy can work is “through compromise and consensus.”

“Nobody got everything they wanted, but the American people got what they needed,” he said of the debt ceiling legislation. “We avoided an economic crisis and an economic collapse.”

Biden indicated he would sign the bill on Saturday.

First speech from the Oval Office

It was the first time that Biden spoke directly to the nation from the Oval Office, the most formal spot in the White House usually reserved for occasions when presidents address issues of great importance.

He wanted the American people to understand “how important it was to do this,” White House press secretary Karine Jean-Pierre said during her briefing on Friday. “Breach could have been catastrophic.”

The bill allows the government to continue borrowing more money over the next 19 months to meet its obligations, exceeding the current debt limit of $31.4 trillion.

Jean-Pierre said the administration was “confident” that with this deal the government would have the funds to meet its obligations before June 5, when the Treasury would run out of cash.

bipartisan support

The Senate voted Thursday night 63-36 in favor of the measure. Democratic Sens. John Fetterman, Elizabeth Warren, Ed Markey, Jeff Merkley and Bernie Sanders, an independent who is part of the Democrats, joined 31 Republicans in voting against the bill.

Despite objections from some Republican lawmakers who said it didn’t cut spending enough and some Democrats who said it cut too much, the bill passed the House of Representatives 314-117 on Wednesday night. Among the yes votes, the 165 votes for Democrats outnumbered the 149 votes for Republicans, who narrowly control the chamber.

The legislation does not establish a new currency ceiling, but the borrowing authority would extend until January 2, 2025, two months after next year’s presidential election. In addition, the legislation requires keeping most federal spending at current levels in the fiscal year beginning in October, with a 1% increase over the next 12 months.

reforming the process

With the disputes over, many are pushing for Republicans and Democrats to reform the process of raising the debt ceiling while addressing fiscal health.

“It is time that we really rethink how we carry out our fiscal restructuring and how we put our fiscal house in order, but without using the debt limit as a hostage negotiation tool,” said Rachel Snyderman, senior associate director for trade policy. and Bipartisan Economic Policy Center.

Legislation like the Responsible Budget Act, introduced in the last Congress, would reform the budget process but eliminate the risk of default, he told VOA. The bill would require lawmakers to vote annually on policies to reduce debt while automatically suspending the debt ceiling.

Current projections from the Congressional Budget Office show a federal budget deficit of $1.5 trillion by 2023. Annual deficits would nearly double over the next decade, reaching $2.7 trillion in 2033.

The deficit is projected to grow from 6% of gross domestic product next year to 6.9% in 2033, well above the 50-year average of 3.6% of GDP, according to the CBO.

House Speaker Kevin McCarthy, a Republican who brokered the deal with Biden, told reporters Thursday that passing the bill “was not an easy fight.” He stressed budget savings and criticized Democrats who wanted to separate the debate on future public spending from the need to suspend the debt limit in order to meet current financial obligations.

“We put the citizens of the United States first, and we didn’t do it by taking the easy way out,” McCarthy said. “We didn’t do it the way people have done it in the past, just by raising [el techo de la deuda]. We decided you had to spend less and we achieved that goal.”

McCarthy said he intended to follow Wednesday’s action with further efforts to cut federal spending.

The measure does not increase taxes on the wealthy, a move sought by Democrats. Nor will it stop the total national debt from continuing to rise, perhaps by another $3 trillion or more over the next year and a half until the next debt limit expires.

Other articles in the legislation reduce the number of new agents that will be hired by the country’s tax collection agency; demand that states return to the federal government $30 billion in unspent assistance from the coronavirus pandemic; and extend from 50 to 54 years the maximum age required to work to receive food aid.

[El periodista de VOA Ken Bredemeier contribuyó a este despacho]

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