US Pres. Biden Signs Debt Ceiling Deal into Law

Facts

• On Saturday, US Pres. Joe Biden signed a bill that suspends Washington's $31.4T debt limit until 2025 ahead of a June 5 deadline set by the Treasury to avert a destabilizing default.¹
• Sharing a video of him signing the bill, Biden posted on Twitter: "I just signed into law a bipartisan budget agreement that prevents a first-ever default while reducing the deficit, safeguarding Social Security, Medicare, and Medicaid, and fulfilling our sacred obligation to our veterans."²
• This comes as the US Senate voted 63-36 on June 1 to pass the compromise House bill brokered by Biden and Republican House Speaker Kevin McCarthy to allow the US debt ceiling to be raised.³
• The bill caps federal spending for the next two years, greenlights major energy projects, reduces funding for the Internal Revenue Service, and establishes new requirements for social safety-net programs.⁴
• It will also see nondefense spending remain roughly level in the fiscal year 2024 before increasing by 1% the following year and requiring Congress to approve 12 annual spending bills or face a 1% cut on spending limits.⁵
• The Congressional Budget Office estimates budget deficits will be reduced by $1.5T over the next decade, below the $4.8T savings House Republicans were seeking in a bill passed in April, and also less than the $3T reduction in the budget Biden proposed through new taxes.⁶

Sources: ¹Al Jazeera, ²KSLNewsRadio, ³Reuters (a), ⁴CBS, ⁵Associated Press, and ⁶Reuters (b).

Narratives

• Democratic narrative, as provided by New York Times. Regardless of its terms, by signing the debt ceiling bill into law, Biden just saved the nation from imminent economic collapse, prevented economic instability worldwide, and averted running out of money to pay its obligations for two years — all while prevailing in this game of chicken and keeping his agenda on track.
• Republican narrative, as provided by New York Post. Republicans have saved the country from the scourge of default. Had conservatives not fought for America's future, the Washington uni party cartel would've gotten everything it wanted at the cost of the country. Although the US will continue to spend more than it receives, McCarthy has produced a compromise closer to the GOP's vision than the Democrats'.
• Narrative C, as provided by Guardian. Both sides will continue to have questions over the quality of the deal for weeks and months, but there was no more time for negotiations and concessions. Regardless of whether it’s a good deal or a bad one, it was necessary to prevent worldwide economic chaos.

Predictions