President Joe Biden has signed the law suspending the national debt limit until January 1, 2025, to avoid the first default of the United States.
The suspension of the debt limit until early 2025 removes the threat of default until after next year's presidential election. In addition to addressing the debt limit issue, the law sets a cap on non-defense spending, expands work requirements for some food stamp beneficiaries, and recovers some funds for Covid-19 aid.
The bipartisan agreement on the debt limit was reached between the White House and House Republicans, at the culmination of long days and nights of controversial negotiations that sometimes seemed on the verge of failure.
To get to the finish line, lawmakers made a rush ahead of June 5, when the Treasury Department warned that it would no longer be able to pay all of the nation's obligations fully and on time — a scenario that could trigger a global economic catastrophe.
The timing for Congress to pass the bill was extremely tight, with little margin for error, and this put enormous pressure on the leadership of both parties. On Thursday night, lawmakers in the upper house passed the bill with overwhelming bipartisan support, with 63 senators in favor of the legislation and 36 against. The House of Representatives had also given the green light to the agreement on Wednesday evening.
Once approved, the deal faced backlash from the far left and far-right, but ultimately won the support of a wide range of lawmakers on both sides, many of them moderates.
"Senators from both parties voted to protect the hard-earned economic progress we made and prevent a first-ever default by the United States," Biden said in a statement after the vote. "Together, they have proven once again that America is a nation that pays its bills and meets its obligations — and always will be."
In an address to the nation yesterday from the Oval Office, Biden said that "if we didn't reach an agreement, there were extremist voices threatening to lead America, for the first time in our 247-year history, toward default. Nothing would have been more irresponsible, nothing more catastrophic," the president added.