3-6-2023 (WASHINGTON) In a rare Oval Office address, US President Joe Biden declared on Friday that the debt ceiling bill passed by Congress had saved the country from an “economic collapse” after weeks of intense negotiations. Speaking from behind the historic Resolute Desk during a live primetime television broadcast, Biden characterized the deal as a compromise where neither Democrats nor Republicans achieved all their desired outcomes.
According to Biden, the agreement averted a severe economic crisis, emphasizing that “the stakes could not have been higher.” He announced his intention to sign the bill into law on Saturday, granting the government authorization to extend the debt ceiling and continue borrowing.
The US Treasury Department had previously warned that failure to raise the debt ceiling by Monday could result in a default on the country’s $31 trillion debt, potentially triggering market panic, widespread job losses, and a global recession.
Biden stressed that such an outcome would have been catastrophic, recognizing the gravity of the situation. Oval Office addresses are traditionally reserved for moments of exceptional national danger or significance, and Biden aimed to project a reassuring and composed demeanor throughout his speech. Employing a lighthearted tone with occasional chuckles and smiles, he commended his opponents for negotiating in good faith and expressed his unwavering optimism.
The president highlighted that Congress had safeguarded “the full faith and credit of the United States.” Nevertheless, despite the resolution reached by the House and Senate after weeks of disagreements, the reputation of the US economy suffered a blow.
On Friday, credit rating agency Fitch announced that it would maintain the United States’ “AAA” credit rating on negative watch, despite the deal.
Typically, the debt ceiling is an uncontroversial accounting measure approved annually by Congress, allowing the government to continue borrowing money to cover existing bills. However, this year, hard-right Republicans in the House of Representatives used the must-pass vote as leverage to demand spending cuts in various Democratic priorities.
This set the stage for a political showdown that risked descending into chaos before the two sides ultimately agreed to raise the debt ceiling while freezing certain budgetary spending, falling short of the Republicans’ demands for cuts.
Although House Speaker Kevin McCarthy, a Republican, touted the compromise bill as a major victory for conservatives, he faced criticism from hardliners within his party who argued that he had conceded too much.
For Biden, who is campaigning for re-election in 2024, the dramatic resolution to the crisis represents a triumph, showcasing his negotiating prowess and positioning him as a moderate voice in an increasingly polarized political landscape.
In his speech, Biden went out of his way to commend Speaker McCarthy, who has long been loyal to former President Donald Trump. Biden defeated Trump in the 2020 election, and Trump is seeking his own return to the presidency in 2024.
“I want to commend Speaker McCarthy. You know, he and I, we and our teams, were able to get along, get things done,” Biden remarked, describing the Republican negotiators as “completely honest and respectful of one another.”
