President Joe Biden has signed the legislation that lifts the nation’s debt ceiling just two days before the deadline, thereby preventing a default on the federal government's debt.
H.R. 3746, the Fiscal Responsibility Act, which the president signed privately on Saturday, 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, and it suspends the debt limit through January 1, 2025, and increases the limit on January 2, 2025.
“Passing this budget agreement was critical. The stakes could not have been higher," President Biden said of the deal Friday night in a televised address from the Oval Office. “Nothing would have been more catastrophic,” he said, than defaulting on the country's debt.
SEE MORE: How Biden and McCarthy struck a debt-limit deal
By raising the nation's debt limit, currently set at $31.4 trillion, the government secures the ability to borrow funds necessary for fulfilling its existing financial obligations.
According to the Congressional Budget Office, the proposed package is projected to reduce the federal deficit by $1.5 trillion over a ten-year period.
The passing of the bill was a challenging situation for both Democrats and Republicans, as they had to fight for support for the bill with multiple members of their parties. Conservative Republicans were disappointed the bill didn't make deeper spending cuts, while progressive Democrats took issue with work requirements for older Americans who are seeking food aid.
"No one got everything they wanted, but the American people got what they needed," President Biden said, highlighting the "compromise and consensus" in the deal. "We averted an economic crisis and an economic collapse."
