Updated June 3, 2023 at 1:56 PM ET
President Biden on Saturday signed a bipartisan agreement raising the debt ceiling and averting a calamitous debt default.
In a rare Oval Office speech Friday, the president outlined how close the economy was to being thrown into a recession. He said millions of Americans would have lost their jobs.
"There were extreme voices threatening to take America, for the first time in our 247 year history, into default on our national debt," the president said. "Nothing. Nothing would have been more irresponsible. Nothing would have been more catastrophic."
The nearly 15-minute address served as a victory lap for the president after the Senate passed the legislation he negotiated with House Speaker Kevin McCarthy to raise the debt ceiling for two years and cut federal spending.
"No one got everything they wanted, but the American people got what they needed," he said.
In what appeared to be a nod to one of this key arguments for reelection, Biden underscored the type of steady leadership he asserts he can continue to provide in comparison to some of the partisan fighting being waged by more hardline Republicans, including leading Republican candidates for president.
"No matter how tough our politics get, we need to see each other not as adversaries, but as fellow Americans," Biden said. "Treat each other with dignity and respect. To join forces as Americans to stop shouting. Lower the temperature. Work together to pursue progress, secure prosperity and keep the promise of America for everybody."
Both sides claim a win, with detractors in both parties
Biden listed all his administration priorities that he were protected as part of the deal, including the preservation of Social Security, Medicare, Medicaid, health care for veterans and technology investments.
But Republicans have claimed victory as well.
The compromise cuts federal spending by $1.5 trillion over a decade, according to the Congressional Budget Office. It also imposes stricter work requirements for food stamps that the Biden administration opposed. It claws back money for the IRS and approximately $27 billion in funding to federal agencies intended to combat the coronavirus pandemic.
Some far-right Republicans opposed the deal, arguing it didn't cut enough spending, while some hard-left Democrats said the increased work requirements could lead to more hunger.
But in the end, a majority of Republicans and Democrats came together to pass the legislation.
Months of partisan rancor end just ahead of deadline
Passage of the bipartisan bill comes just days ahead of when Treasury Secretary Janet Yellen warned that the government would begin to run out of money to pay its bills.
It also ends months of tensions in Washington after Republicans refused to raise the debt limit unless Biden and the Democrats placed more restrictions on federal spending.
Biden even considered invoking the 14th Amendment of the Constitution to keep making payments on the nation's debt — but ultimately determined there was not enough time left before a looming deadline to use the untested strategy.
In his address Friday night, Biden singled out McCarthy, whom he said was respectful and straightforward in his negotiations.
"Both sides operated in good faith," he said. "Both sides kept their word."
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