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Biden addresses nation after Senate passes debt limit bill

What we covered here

  • Biden's address: President Joe Biden addressed the nation Friday evening on the heels of the passage of the debt limit bill that averted a US default. He said he will sign the bill into law on Saturday.
  • Emphasis on bipartisan vote: The president said the deal reached with Speaker Kevin McCarthy amounted to proof that the type of bipartisanship he promised as a candidate to seek was not only still possible but essential to avoiding disaster.
  • What's in the bill: In addition to suspending the debt limit, the bill caps non-defense spending, expands work requirements for some food stamp recipients and claws back some Covid-19 relief funds. Read more about the legislation here.
Our live coverage has ended. Read more about the debt ceiling bill here – or read through the posts below.
8:08 p.m. ET, June 2, 2023

"Both sides operated in good faith." Biden hails McCarthy's role in debt deal negotiations

U.S. President Joe Biden shakes hands with U.S. House Speaker Kevin McCarthy after the State of the Union address to a joint session of Congress at the Capitol on Feb. 7, 2023, in Washington, DC. Jacquelyn Martin/Pool/Reuters/File

President Joe Biden stressed the bipartisan nature of an agreement to raise the debt ceiling in his first Oval Office address on Friday, commending leaders from both parties and warning in stark terms about what could have happened if a deal was not reached. 

He also said that he would sign the debt ceiling bill on Saturday. 

“I'm speaking to you to report on the crisis averted and what we're doing to protect America's future,” Biden said, speaking from behind the Resolute Desk. 

The president went out of his way to mention House Speaker Kevin McCarthy by name, commending him for operating “in good faith.”

“He and I – and our teams – were able to get along, get things done, were straightforward with one another, completely honest with one another, respectful with one another,” Biden said. “Both sides operated in good faith. Both sides kept their word.” 

He said the rest of congressional leadership – House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer, and Senate Minority Leader Mitch McConnell – all “acted responsibly and put the good of the country ahead of politics.” 

Biden also touted his own priorities, including protecting Medicaid, Medicare and veterans’ benefits from cuts and keeping his infrastructure and CHIPs and Science laws intact.

But despite taking a few swipes at Republican priorities, Biden still came back to cooperation, saying, “I know bipartisanship is hard and unity is hard, but we can never stop trying.”

“Because of moments like this one – the ones we just faced – where the American economy and the world economy is at risk of collapsing. There's no other way,” he said. “No matter how tough our politics gets, we need to see each other as not as adversaries but as fellow Americans. Treat each other with dignity and respect, to join forces with Americans to stop shouting, lower the temperature and work together to pursue progress, secure prosperity and keep the promise of America for everybody."
7:57 p.m. ET, June 2, 2023

In Oval Office remarks, Biden says debt ceiling deal is proof that bipartisanship is essential

U.S. President Joe Biden delivers a nationally televised address from the Oval Office of the White House on June 2 in Washington, DC. Win McNamee/Getty Images

President Joe Biden said the budget deal that will raise the federal borrowing limit and avoid default is proof that the type of bipartisanship he promised as a candidate to seek was not only still possible but essential to avoiding disaster.

The president, speaking from the Oval Office on Friday evening, told Americans the package ensures economic progress going forward and amounts to a "crisis averted."

"Passing this budget agreement was critical. The stakes could not have been higher," he said.

The decision to speak in the most formal of presidential settings came after weeks of fraught negotiations over the borrowing limit with House Speaker Kevin McCarthy.

In his address, Biden underscored his efforts to work across the aisle to secure a positive outcome — an objective he noted had been met with intense skepticism.

"When I ran for president, I was told that the days of bipartisanship is over and Democrats and Republicans could no longer work together. I refuse to believe that," Biden said. "The only way American democracy can function is through compromise and consensus."

The president said neither Republicans nor Democrats "got everything they wanted but the American people got what they needed."

"We averted an economic crisis and an economic collapse," he said.

The Treasury Department had said it will run out of cash to pay its bills in full and on time on Monday. Economists had warned of severe consequences of a national default.

7:12 p.m. ET, June 2, 2023

Biden says he will sign the debt limit bill on Saturday

President Joe Biden said he will sign the debt limit bill on Saturday.

The legislation was passed by both chambers of Congress this week as lawmakers scrambled to avoid a US debt default.

“Both sides operated in good faith. Both sides kept their word," Biden said, speaking in the Oval Office Friday evening.

7:08 p.m. ET, June 2, 2023

HAPPENING NOW: Biden speaks from Oval Office after congressional passage of debt ceiling bill


President Joe Biden is addressing the nation from the Oval Office after both chambers of Congress passed a budget agreement that will raise the debt ceiling and avoid default.

The remarks come after weeks of fraught negotiations over the borrowing limit. The deal struck between Biden and House Speaker Kevin McCarthy will raise the debt ceiling for two years, freeze domestic spending, impose some new work requirements on food stamps and alter certain energy permitting rules.

The measure cleared the House and Senate in the last few days and Biden is expected to sign the bill into law before the end of the weekend.

The president is expected to tell Americans the package ensures economic progress going forward and emphasize the high-stakes nature of the negotiations and agreement, according to excerpts of the speech.

6:15 p.m. ET, June 2, 2023

Biden expected to emphasize high stakes of passing debt ceiling agreement in Oval Office address tonight

President Joe Biden is expected to emphasize the high stakes in passing the debt ceiling and its implication on the economy in his planned Oval Office address Friday night.

The president is expected to speak around 7 p.m. ET.

Biden will talk about the importance of passing a budget that "continues to grow our economy and reflects our values as a nation," according to an excerpt of the speech.

 "That’s why I’m speaking to you tonight — to report on a crisis averted and what we are doing to protect America’s future. Passing this budget agreement was critical. The stakes could not have been higher," the excerpt says.

He will also discuss the negotiations between the White House and House Republicans, including mentions of cutting spending and protecting Social Security, Medicare and Medicaid. 

"No one got everything they wanted but the American people got what they needed. We averted an economic crisis and an economic collapse," according to the excerpt.

Biden will sign the bill into law as soon as Saturday, the White House said.
4:28 p.m. ET, June 2, 2023

Dow notches its best day of the year as investors cheer debt ceiling deal and jobs report

Traders work on the floor of the New York Stock Exchange on Friday. Seth Wenig/AP
The Dow on Friday saw its best one-day gain since January as Wall Street applauded the debt ceiling bill that the Senate passed on Thursday night. Investors also cheered the May jobs report, which showed a cooldown in some parts of the labor market.
  • The Dow soared 701 points, or 2.1%.
  • The S&P 500 gained 1.4%. 
  • The Nasdaq Composite added 1%.

All three major indexes rose for the week, with the Nasdaq Composite notching its sixth straight week of gains. 

The White House said Friday that President Joe Biden will sign the bill raising the debt ceiling “as soon as tomorrow,” leading investors to breathe a sigh of relief after weeks of concern that the United States could default on its debt for the first time. 

Meanwhile, the May jobs report showed that the labor market remains hot but has some pockets of cooling. 

The VIX, Wall Street's fear gauge, fell to 14.6, closing below 15 for the first time since February 2020.

Remember: As stocks settle after the trading day, levels might still change slightly. 


4:13 p.m. ET, June 2, 2023

Biden will sign debt ceiling bill "as soon as tomorrow," White House says

White House press secretary Karine Jean-Pierre speaks to reporters on Friday. Evan Vucci/AP
President Joe Biden will sign the bill raising the debt ceiling “as soon as tomorrow,” the White House said Friday.
“We’re going to work very quickly with (Congress) to get this done to make sure we can sign it,” White House press secretary Karine Jean-Pierre told reporters. “Hopefully, as soon as tomorrow.”

She said the White House would have to “let the House and the Senate do what they need to do,” so it can be delivered to Biden’s desk for his signature. 

The legislation needs to be finalized by Monday to ensure the US is able to pay all of its bills. 

Biden's Oval Office speech: Biden chose Friday evening for his Oval Office address because of the “gravity” of the moment, the White House said Friday, previewing a message of how important it was to avoid the nation’s first-ever default — and to do so in a bipartisan way. 

“There is a gravity as you all can imagine of this moment,” Jean-Pierre said, “and so the president wanted to make sure that he addressed the American people directly.” 

Biden is expected to speak at 7 p.m. ET in his first address from the Oval Office as president.

Jean-Pierre said Biden wanted to “lay out” for the American people the kind of “catastrophe” it would have been to “undermine the full faith and credit of the United States.”

“He just wanted to make sure that the American people understood how important it was to get this done, how important it was to do this in a bipartisan way," she added.

2:39 p.m. ET, June 2, 2023

Here's what happens once the debt ceiling is raised

The Treasury Department building in Washington, DC, May 19. Phelan M. Ebenhack/AP

The faucets at the US Department of the Treasury are set to turn back on after nearly five months of frozen pipes.

In a vote on Thursday evening, the Senate approved a measure to suspend the nation’s debt limit through January 1, 2025. President Joe Biden is expected to swiftly sign the bill into law to avert the United States’ first-ever default on its debt.
Since the debt ceiling was breached in mid-January, the Treasury Department has not been able to borrow more money. To pay its bills on time, Treasury has undergone a series of extraordinary measures to buy it more time in hopes that Congress takes action to suspend or raise the debt limit.

These measures included selling existing investments and suspending reinvestments of the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund. Doing so helped the Treasury free up billions of dollars to delay a potential default.

Now, Treasury will try to quickly get back to business as usual. To do that, the Treasury will need to raise cash. Fast.

By law, the Treasury Department is obligated to make any funds that were affected by the extraordinary measures whole. It is also required to pay interest on the lapse in funding.

One way it hopes to grow its cash balance is by auctioning off $15 billion worth of one-day cash management bills on Friday.

These bills mature in a relatively short time frame, ranging from a few days to a year, according to the Treasury Department. They’re used to help manage the Treasury’s short-term financing needs.

Unlike Treasury bill auctions that occur on a weekly and monthly basis, cash management bill auctions are irregular, though not uncommon. For instance, last year the Treasury held more than 30 cash management bill auctions.

It is, however, quite unusual for the department to auction debt that matures in just one day. Over the past 25 years, the Treasury has held just six one-day cash management bill auctions.

In addition to Friday’s auction, a Thursday auction saw $25 billion of three-day cash management bills yielding 6.15%. That exceeds the yields at which almost all other Treasury bills are trading, underscoring the premium investors are demanding to buy the government’s debt.

The Treasury is tentatively issuing an additional $123 billion in longer-term bills on June 8. Ahead of the Senate’s vote, the Treasury said it was “conditional on enactment of the debt limit suspension because Treasury forecasts insufficient headroom under the current debt limit to issue securities in these amounts on June 8.”

Translation: The Treasury had been hedging its bets so that it is not on the hook to make interest payments on time to bill holders in the event that the debt ceiling deal wasn’t signed to law in time to avert default. Now that the Senate has passed the bill and Biden has said he’d sign it, Treasury is set to announce more borrowing initiatives.
Read more here.
1:26 p.m. ET, June 2, 2023

Fitch Ratings could still downgrade America’s credit rating

People are silhouetted inside the US Capitol on Friday. Nathan Howard/Bloomberg/Getty Images
Fitch Ratings is keeping the United States on watch for a potential credit rating downgrade even after Congress passed a last-minute bill to avert a disastrous default.
Fitch Ratings on Friday said it is keeping the United States on rating watch negative and plans to make a decision on a potential downgrade by the end of September.

Although the resolution to the debt ceiling fight is a “positive,” Fitch expressed deep concern about the recurring brinksmanship and worsening polarization in Washington.

Fitch argued on Friday there has been a “steady deterioration in governance over the last 15 years.”

Why this matters: A credit rating downgrade would raise the government’s borrowing costs, forcing Washington to spend more money on interest and less on education, healthcare, defense and other priorities.

Fitch, one of the three major ratings companies, put the United States on watch for a potential downgrade last week before House Republicans and President Joe Biden reached a compromise to raise the debt ceiling. The Congressional Budget Office estimates the agreement will provide an estimated savings of $1.5 trillion over the next decade.

Fitch said it plans to resolve the negative watch in the third quarter. It will consider the “full implications of the most recent brinksmanship episode” as well as the outlook for the medium-term trajectory for the budget and debt.

Read more here.