US Default Crisis Averted... Biden to Sign Agreement in 3 Days

Only President Biden's Signature Remains

The unprecedented U.S. default (debt default) crisis is expected to come to an end on the 3rd (local time) with the completion of the legislation to raise the federal government debt ceiling.

According to major foreign media, U.S. President Joe Biden welcomed the congressional passage of the federal government debt ceiling increase agreement (Fiscal Responsibility Act 2023) on the 2nd and announced that he would sign the bill on the 3rd.

Earlier, the House of Representatives, controlled by the Republicans, passed the agreement with 314 votes in favor and 117 against, and the Senate, controlled by the Democrats, agreed with 63 votes in favor and 36 against. The agreement, which passed the Senate following the House on the 1st, will take effect once President Biden signs it.

President Biden, regarding the avoidance of the first-ever default crisis by the U.S. Congress passing the agreement that evening, said in a public address from the White House, "We have avoided the crisis of economic collapse," and welcomed that "(both parties) kept their promises."

President Biden emphasized, "I said bipartisan legislation was impossible, but it is not," adding, "We have already passed the infrastructure law and the semiconductor law. Now we have reached a bipartisan budget agreement."

He also said, "No one got everything they wanted, but Americans got what they needed," and "We have prevented an economic crisis and collapse." He added, "Passing the agreement was absolute. The risk was higher than ever," and announced that he plans to sign the bill on the 3rd.

U.S. President Joe Biden. (Photo by AFP Yonhap News)

The bill agreed upon by both sides (Fiscal Responsibility Act 2023) includes raising the debt ceiling for two years, freezing spending until next year, and increasing spending by 1% in 2025. The federal government debt ceiling, which had already been reached at $31.4 trillion (approximately 42 quadrillion won) in January, will be suspended to be raised until January 1, 2025. In exchange, discretionary spending for the 2024 fiscal year (spending that the executive branch and Congress have discretion to budget and review), excluding items such as defense, will be frozen, and the budget in 2025 will be limited to a maximum increase of 1%.

However, due to the loss of leadership and trust in U.S. politics, which played a chicken game until the last moment of the default deadline using economic collapse as leverage, it is uncertain whether the external credit of the U.S. economy can be properly restored in the future.

This content was produced with the assistance of AI translation services.