Joe Biden signed a bill on Saturday to suspend the US debt ceiling, ending a months-long standoff with the Republican House speaker, Kevin McCarthy, and averting a federal default that could have upended the world economy. Economists warned that a default could have caused the US unemployment rate to double while significantly damaging gross domestic product. In a televised address from the Oval Office on Friday evening, Biden said: “Passing this budget agreement was critical. The stakes could not have been higher. “If we had failed to reach an agreement on the budget, there were extreme voices threatening to take America, for the first time in our 247-year history, into default on our national debt. Nothing, nothing would have been more irresponsible.” The signing of the bill came one day after the Democratic-held Senate passed it in a bipartisan vote, 63-36, sending the proposal to Biden’s desk a few days before the 5 June deadline. A day earlier, the bill passed the Republican-controlled House by 314-117. “It was critical to reach an agreement, and it’s very good news for the American people,” Biden said on Friday. “No one got everything they wanted. But the American people got what they needed.” In a statement on Saturday, the White House thanked Democratic and Republican leaders in Congress “for their partnership”. The White House also tweeted video of Biden signing the bill in the Oval Office. Heralding the “safeguarding [of] Social Security, Medicare and Medicaid, and fulfilling our scared obligation to our veterans”, Biden said: “Now, we continue the work of building the strongest economy in the world.” The bill signing followed the release on Friday of strong monthly jobs figures. The new law will suspend the borrowing limit until January 2025, ensuring the issue will not resurface before the next presidential election. In negotiations with Biden, McCarthy secured concessions aimed at cutting government spending. The legislation includes a modest reduction in non-defense discretionary spending as well as changes to work requirements for the Supplemental Nutrition Assistance and the Temporary Assistance for Needy Families programs. The concessions were a partial defeat for Biden, who spent months insisting he would not negotiate and repeatedly called on Congress to pass a bill with no strings attached. The president was forced to the negotiating table after House Republicans passed a debt ceiling bill in late April. But as he discussed the compromise bill, Biden expressed pride that he and his advisers were able to rebuff many Republican demands. The bill passed by House Republicans would have enacted much steeper cuts and broader work requirements for benefits while raising the borrowing limit until 2024. “We averted an economic crisis, an economic collapse,” Biden said on Friday. “We’re cutting spending and bringing the deficits down at the same time. We’re protecting important priorities – from Social Security to Medicare to veterans to our transformational investments in infrastructure and clean energy.” Biden’s cause for celebration was a source of outrage among hard-right Republicans. The debt ceiling bill was opposed by 71 Republicans in the House and 17 in the Senate, who argued it did too little to address the federal debt of more than $31tn. Members of the House Freedom caucus repeatedly attempted to block the compromise bill. “President Biden is happily sending Americans over yet another fiscal cliff, with far too many swampy Republicans behind the wheel of a ‘deal’ that fails miserably to address the real reason for our debt crisis: SPENDING,” Scott Perry of Pennsylvania, chair of the House Freedom caucus, said on Wednesday. Progressives harbored their own concerns, saying the cuts and work requirements amounted to a betrayal of voters. Five progressives in the Senate, including Bernie Sanders of Vermont, and 46 in the House decided to vote against the bill. “I could not in good conscience vote for a bill that cuts programs for the most vulnerable while refusing to ask billionaires to pay a penny more in taxes,” Sanders wrote in a Guardian op-ed on Friday. “Deficit reduction cannot just be about cutting programs that working families, the children, the sick, the elderly and the poor depend upon.” A particular source of anguish for progressives was the bill’s handling of defense spending. While non-defense priorities like education and healthcare will have to endure cuts, the Pentagon budget is set to grow. The inflated spending outlined in the bill did not go far enough for defense hawks already weighing options to spend more. Progressives saw the uneven distribution of cuts as an insult. “At a time when we spend more on the military than the next 10 nations combined I could not, in good conscience, vote for a bill that increases funding for the bloated Pentagon and large defense contractors that continue to make huge profits by fleecing American taxpayers with impunity,” Sanders wrote. In the end, the vast majority of Democrats voted to prevent a default. Biden’s signing of the bill prevents that outcome for now, but lawmakers will need to take up the matter again before January 2025, when the new suspension expires. Many Democrats and some economists have called for the elimination of the debt ceiling to remove any threat of default in future, progressives suggesting Biden can unilaterally do away with the borrowing limit by invoking the 14th amendment of the constitution. The amendment states that the validity of the public debt of America “shall not be questioned”. If Biden were to follow that path, the recent battle over the debt ceiling could prove to be the last. “The fact of the matter is that this bill was totally unnecessary,” Sanders wrote. “I look forward to the day when [Biden] exercises this authority and puts an end, once and for all, to the outrageous actions of the extreme right wing to hold our entire economy hostage in order to protect their corporate sponsors.”