“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
From CNN's Elisabeth Buchwald
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.
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 atwhich 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.
Fitch Ratings could still downgrade America’s credit rating
From CNN's Matt Egan
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.
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.
Here's how the debt limit package is changing the Temporary Assistance for Needy Families program
From CNN's Tami Luhby
There are a few adjustments to the Temporary Assistance for Needy Families (TANF) program under the new debt ceiling package.
Currently: States must ensure that a certain share of those receiving cash aid from the TANF program participate in specific work-related activities – 50% for all families and 90% for two-parent households.
Only certain activities, including employment, training, job search assistance and community service programs, satisfy the mandate.
New: The legislation tightens the current work requirements, primarily by adjusting the work participation rate credits that states can receive for reducing their number of cases. Starting in October 2025, the formula will compare thecurrent count with what it was in 2015 instead of 2005.
Because caseloads declined significantly in most states between 2005 and 2015, these states will have to make sure a greater share of families are working to meet the mandate.
Biden to address nation from Oval Office for first time as president following debt ceiling bill passage
From CNN's Kevin Liptak
President Joe Biden talks to the media upon returning to the White House on Thursday. Evelyn Hockstein/Reuters
President Joe Biden will address the nation from the Oval Office on Friday evening, after congressional passage of a compromise measure that raises the federal borrowing limit and avoids a catastrophic default.
It's Biden's first time speaking to the country directly from the Oval Office. He plans to deliver remarks at 7 p.m. ET.
In his speech, Biden is likely to discuss the process that led to the deal and how he plans to move forward, people familiar with the speech said.
Biden has intentionally avoided declaring victory after brokering the agreement between the White House and House Speaker Kevin McCarthy, partly in the hopes of securing the necessary Republican votes for the bill to pass.
That tactic appeared to work; the measure cleared the House and Senate in bipartisan fashion. Biden is expected to sign the bill into law as soon as Friday, potentially before he speaks.
The Oval Office setting: The decision to speak in the most formal of presidential settings comes after weeks of fraught negotiations over the borrowing limit before the deal was ultimately struck.
Oval Office speeches are often used for matters of grave national importance, including security matters.
The setting offers an air of authority and familiarity to viewers accustomed to hearing a president begin his remarks with, “My fellow Americans.”
Yet the past two presidents largely eschewed the Oval Office for addresses to the nation, finding the format somewhat stilted.
House Republicans wanted to add work requirements for some American adults receiving Medicaid, but the debt ceiling bill doesn't include them.
Currently: There is no federal work requirement.
Former President Donald Trump's administration granted waivers to several states to impose such a mandate on certain enrollees. Litigation stopped or chilled states’ implementation of the effort, and President Joe Biden's administration subsequently withdrew the permissions – though a federal district court judge allowed the initiative to proceed in Georgia.
Unchanged: There is no federal work requirement.
House Republicans had wanted to require certain adult Medicaid recipients to work, perform community service or participate in an employment program for at least 80 hours a month or earn a certain minimum monthly income. Their earlierbill called for applying this mandate to those ages 19 to 55, but not those who are pregnant, parents of dependent children, physically or mentally unfit for employment or enrolled in education or in substance abuse programs, among others.
The provision would have resulted in about 1.5 million adults, on average, losing federal funding for their Medicaid coverage, according to the Congressional Budget Office. But states would have picked up the full tab for about 900,000 of them, leaving around 600,000 uninsured.
These are the changes to the SNAP program under the debt ceiling bill
From CNN's Tami Luhby
Jaqueline Benitez, who depends on California's SNAP benefits to help pay for food, shops for groceries at a supermarket in Bellflower, California, in February. Allison Dinner/AP/File
There are some modifications to the Supplemental Nutrition Assistance Program (SNAP) under the new debt ceiling package.
Currently: Able-bodied adults without dependents who are between ages 18 and 49 can only receive food stamps for three months out of every three years unless they work or participate in other activities at least 20 hours a week.
New: The number of people subject to the mandate will be broadened in phases, so that by 2025, it will apply to those between the ages of 18 and 54.
But veterans and people experiencing homelessness of all ages, as well as adults under age 25 who were previously in foster care, will be exempt under the debt ceiling bill.
These provisions will expire in October 2030. The legislation also tightens the share of unused exemptions states can carry over from year to year.
Biden says he looks forward to signing debt ceiling bill
From CNN's Betsy Klein
President Joe Biden said he is eager to sign the bill to raise the debt ceiling into law, which could happen as soon as today.
In a statement touting the May jobs report, he offered a preview of a bipartisan message that he could expand upon as he addresses the nation from the Oval Office later this evening:
“I look forward to signing the bipartisan budget agreement into law. The agreement protects our historic and hard-earned economic recovery, and all the progress that American workers have made in the last two years. And it protects key priorities and accomplishments from the last two years. Our work is far from finished, but this agreement is a reminder of what’s possible when we act in the best interests of our country."
9:57 a.m. ET, June 2, 2023
Stocks gain after Senate passes debt ceiling bill
From CNN’s Krystal Hur
Stocks rose Friday after the Senate passed the debt ceiling bill in a vote on Thursday evening.
President Joe Biden is expected to act quickly to sign the bill into law to avoid a default on US debt, ending weeks of turmoil in Washington and on Wall Street.
Treasury yields fell across the curve on the news.
Meanwhile, fresh data from the Bureau of Labor Statistics revealed that the unemployment rate rose to 3.7% in May compared to economists' expectations of 3.5%. Still, the labor market remains sizzling hot — employers added 339,000 jobs last month, surging past the 190,000 economists expected.
The Dow is on pace to end the week down, while the S&P 500 and Nasdaq Composite are on track for gains.
