Biden hails 'crisis averted' with debt ceiling deal

President Joe Biden addresses the nation on the budget deal that lifts the federal debt limit and averts a U.S. government default, from the Oval Office of the White House in Washington, Friday, June 2, 2023. (Jim Watson/Pool via AP)

President Joe Biden has said he will sign the bill authorising increased US government borrowing on Saturday, removing the "catastrophic" threat of default hanging over the world's biggest economy.

"I'm going to sign tomorrow," Biden said in an Oval Office address to the nation on Friday.

Without the bill, the country was expected to default as early as Monday and "nothing would have been more catastrophic," he said.

After nail-biting negotiations, both the Senate and the House of Representatives passed a bill this week that lifts the government's $31.4 trillion debt ceiling.

Biden said to preserve US economic progress it was critical to keep the country's full faith and credit in tact. The new law averted a crisis, he said.

"The stakes could not have been higher," Biden said.

Gravity of the situation

The president, who is running for re-election, noted other bipartisan bills he has signed and offered praise to Kevin McCarthy, the Republican speaker of the House of Representatives, who was his primary negotiating partner.

"The final vote in both chambers was overwhelming," Biden said. The Senate voted 63 to 36 to approve the bill, and the House 314 to 117.

Fitch Ratings said on Friday the United States' "AAA" credit rating would remain on negative watch, despite the agreement that will allow the government to meet its obligations.

US presidents have generally reserved an address from the Oval Office for the most significant, and dramatic of events: the attacks of September 11, 2001, for example, or the Challenger space shuttle explosion.

The White House said Biden was making his remarks there because of the gravity of the situation had the debt ceiling not been raised.