Tuesday was the deadline for averting a default on U.S. financial obligations by raising the debt limit.
The Senate gave final approval to the House-passed bill late last week and sent it to Obama. He signed it in the Oval Office, shortly before departing on a day trip to New Jersey and New York to focus on the criminal justice system, as well as raise money for his fellow Democrats.
The legislation raises the limit on the government's debt through March 2017, pushing reconsideration of what in recent years has become a contentious issue until after the elections for the White House and Congress in November 2016.
The measure also sets federal spending through the 2016 and 2017 fiscal years, and eases strict caps on spending by providing an additional $80 billion, split evenly between military and domestic programs. The Appropriations committees must write legislation to reflect the spending and they face a Dec. 11 deadline to finish the work.
Negotiations over the budget, which began weeks ago, wrapped up quickly last week as Republican Rep. Paul Ryan of Wisconsin prepared to become the new House speaker.
Obama negotiated the agreement with Republican and Democratic congressional leaders who were intent on steering the institution away from the brinkmanship and government shutdown threats that have haunted lawmakers for years. Republican Rep. John Boehner of Ohio, who stepped down both as speaker and from his seat in Congress at the end of last week, said he felt a sense of urgency to reach a deal before turning the gavel over to Ryan. Other lawmakers wanted the issue taken off the table as they look ahead to next fall's elections.
Obama called the deal "a signal of how Washington should work" and urged lawmakers to keep up the collaboration.
"My hope is now that they build on this agreement with spending bills that also invest in America's priorities — without getting sidetracked by a whole bunch of ideological issues that have nothing to do with the budget," he said.
The $80 billion in additional spending is paid for with a mix of spending cuts and revenue increases touching areas from tax compliance to spectrum auctions.
The deal would also avert a looming shortfall in the Social Security disability trust fund that threatened to slash benefits, and head off an unprecedented increase in Medicare premiums for outpatient care for about 15 million beneficiaries.
The plan will lift caps on the appropriated spending passed by Congress each year by $50 billion in 2016 and $30 billion in 2017, evenly divided between defense and domestic programs. Another approximately $16 billion would come each year in the form of inflated war spending, evenly split between the Defense and State departments.
The cuts include curbs on Medicare payments for outpatient services provided by certain hospitals and an extension of a 2-percentage-point cut in Medicare payments to doctors through the end of a 10-year budget. There's also a drawdown from the Strategic Petroleum Reserve, and savings reaped from a Justice Department fund for crime victims that involves assets seized from criminals.
The Associated Press