Watch CBS News

Biden addresses nation on debt ceiling deal to avoid default: "This is vital"

Biden addresses nation on debt bill passage
Biden addresses nation on passage of debt ceiling bill 18:00

Washington — Lauding it as a "crisis averted," President Biden addressed the nation from the Oval Office on Friday night after both chambers of Congress passed an agreement to suspend the debt ceiling and limit federal spending. The president said he will sign the bill, known as the Fiscal Responsibility Act, on Saturday. 

The president spoke less than 24 hours after the Senate approved the agreement, 63-36. All 11 of the amendments the Senate voted on ahead of final passage failed. A majority of Republicans and a majority of Democrats in the House voted in favor of the bill on Wednesday night. 

"This is vital," Mr. Biden said of the bill in his address. "Because it's essential to the progress we made over the last few years, is keeping full faith and credit of the United States of America in passing a budget that continues to grow our economy, and reflects our values as a nation."

It can take a day or two for legislation to reach the president's desk once Congress passes it, as White House press secretary Karine Jean-Pierre noted Friday. 

"The stakes could not have been higher," Mr. Biden said Friday. "If we had failed to reach an agreement on the budget, there were extreme voices threatening to take America — for the first time in our 247-year history — into default on our national debt. Nothing would have been more irresponsible. Nothing would have been more catastrophic."

Congress' passage of the legislation before the weekend ensures that the federal government will have the authority to borrow more and pay its bills ahead of the critical June 5 deadline identified by Treasury Secretary Janet Yellen. 

Markets reacted positively to the debt ceiling deal and strong jobs data on Friday, with investors reassured the nation will not default for the first time in its history.

The agreement suspends the debt limit until the first quarter of 2025, leaving the next fight over the debt limit until after the 2024 presidential election. The deal keeps non-defense discretionary spending roughly flat, with current 2023 levels for 2024. There are spending targets, rather than budget caps, after 2025. The agreement codifies an end to student loan payment suspensions, meaning loan holders will need to begin making payments again in September. It also rescinds unspent COVID-19 relief funds and alters work requirements for the Supplemental Nutrition Assistance Program. 

The agreement didn't cut enough spending to satisfy many conservative Republicans, while some progressives opposed it because they believed the cuts went too far. House Speaker Kevin McCarthy said many in Congress "wanted to make the perfect the enemy of good." 

"This is a good package," he told reporters Wednesday night. "And this is a down payment on what conservative governance can look like in Washington, D.C. But in a divided Washington, it's not perfect, but it's a step in the right direction for the conservative philosophy that I hold and the outcomes that I seek and House Republicans seek."

Senate Majority Leader Chuck Schumer, after the agreement passed the Senate Thursday night, rejected the idea that Democrats had underestimated the new House speaker. 

"No, look at the vote," Schumer said. "Underestimating Kevin McCarthy? Look at the vote in the House and Senate. That says it all. We didn't underestimate him." 

— Ellis Kim contributed to this report.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.