President Barack Obama on Monday signed into law a two-year budget deal that avoids a U.S. default by suspending the debt limit into March 2017 and lifts spending limits through September 2017.
"Last week, Democrats and Republicans came together to set up a responsible long-term budget process. What we now see is a budget that reflects our values, grows our economy, creates jobs and keeps America safe," said Obama from the Oval Office, reported CBS News. "It should finally free us from the cycle of shutdown threats and last-minute fixes."
The bill was signed just one day before the Nov. 3 deadline for Congress to deal with the debt ceiling by raising its borrowing authority, after which the nation would have risked defaulting on its debt. By raising the debt ceiling, the U.S. can borrow the money it needs to pay off existing U.S. debt without having to worry about the issue until the next presidency, explained USA Today.
The deal lifts strict spending caps for the next two years and allows the government to spend an extra $80 billion on military and domestic issues, also providing an additional $32 billion in overseas contingency operation funds for the Pentagon, according to Defense News. The overall defense budget is $607 billion, down from the $612 billion requested by Obama.
The raising of those spending caps dramatically reduces the chances of a government shutdown in December, according to the Hill.
To help pay for the spending increase, the measure includes cuts on Medicare payments for outpatient services provided to certain hospitals as well as a 2-percentage-point cut in Medicare payments to doctors, reported the Associated Press. The deal also allows the U.S. to sell millions of barrels of oil from its Strategic Petroleum Reserve, as well as parts of the wireless spectrum controlled by federal agencies.
The deal now heads to the appropriations committees, who must write legislation to reflect the spending by a Dec. 11 deadline. The president and congressional Republicans are expected to disagree on policy riders to spending bills, especially the issue of funding Planned Parenthood.
Obama asked appropriators to avoid "getting sidetracked by a whole bunch of ideological issues that have nothing to do with our budget," reported the Hill.
"They're going to have to come up with spending bills," he said. "And I'm confident that they can get it done on time."
