Obama signs two-year budget deal

David Jackson | USA TODAY

Show Caption Hide Caption Obama Signs 2-Year Budget, Debt Deal President Barack Obama has signed into law a bipartisan budget bill that avoids national default and sets federal spending through the 2017 fiscal year. (Nov. 2)

WASHINGTON — President Obama formally signed a two-year budget agreement Monday that heads off potential showdowns with Republicans over the debt ceiling and government shutdowns for the remainder of his presidency.

"It is a signal of how Washington should work," Obama said as he signed the bill shortly after it was delivered to the White House, saying the new budget plan invests in both the economy and national security.

The bill suspends the debt limit until March 15, 2017, basically enabling the government to borrow the money it needs to pay off existing U.S. debt — and kicking the issue into the next presidency.

Some House Republicans had proposed the former debt limit — which was set to expire Tuesday — to leverage more spending cuts from the administration.

Outgoing House speaker John Boehner, R-Ohio, put together a plan to avoid breaching the debt limit, saying that doing so would threaten the nation's credit rating.

The bill sets the federal budget for fiscal years 2016 and 2017, with an end to spending caps that had affected both national defense and domestic programs.

"By locking in two years of funding," Obama said, "it should finally free us from the cycle of shutdown threats and last-minute fixes. It allows us to, therefore, plan for the future."