Biden enacts law preventing default in the United States

After several weeks of political confrontation, Joe Biden promulgated a law on Saturday that eliminates the risk of a payment default of the United States, announced the White House. THE US Congress this week adopted this text which allows the public debt ceiling of the United States to be suspended until January 2025, and which also sets certain budgetary objectives.

The president thanked House officials, including Republican Leader Kevin McCarthy, for their “collaboration” on this file, according to the White House statement on Saturday. Without this law, approved Thursday in the Senate with a Democratic majority and Wednesday by the House with a Republican majority, the country risked being in default of payment as of Monday, June 5.

“Nothing would have been more irresponsible, nothing would have been more catastrophic,” the US president said Friday in a solemn address from his Oval Office. “Finding a consensus across partisan divides is difficult. Unity is difficult. But we must never stop trying”, he added, taking up the message of reconciliation which had marked the beginning of his mandate, and which now punctuates his campaign for 2024.

Political stake

Because the issue of this financial confrontation was also very political. Candidate for his re-election, Joe Biden knows that his first handicap is his age, 80 years old. He doubtless hopes that this soap opera on the debt, which has kept the American political and media world spellbound, reinforces an image of a competent and reasonable leader.

Joe Biden thus held Friday to “salute” his most prominent opponent in this debt file, the Republican boss of the House of Representatives Kevin McCarthy. For the latter, it was a question of consolidating his authority over a motley parliamentary group, between moderate conservatives and vociferous supporters of former President Donald Trump.

Also a presidential candidate for 2024, the Republican billionaire had called for keeping a hard line in negotiations with the White House. In the end, each side more or less claims victory. The Republicans are delighted to have pulled off a freeze on certain expenditures, the Democrats are pleased to have essentially preserved social benefits as well as major investments.

Rating of AAA

This altogether austere fight around public finances, which had already taken place when Barack Obama was president, will undoubtedly not have a great effect on the 2024 election. But it has left some traces: the rating agency Fitch thus kept the precious AAA rating of the United States under surveillance on Friday, deploring the “political polarization” and noting “a constant deterioration of governance over the past 15 years”.

Like almost all developed economies, the United States lives on credit – it also has the heaviest debt in the world, in absolute terms. But no other industrialized country comes up against a rigid debt ceiling at regular intervals, which Congress must raise.

(AFP)Show comments