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Biden enacts law ruling out US default

Biden enacts US default bill


After several weeks of political confrontation, Joe Biden signed into law a law on Saturday that removes the risk of a default by the United States, the White House announced. 

The US Congress adopted this week this text which allows the suspension of the public debt ceiling of the United States until January 2025 and which also sets certain budgetary objectives.

The President thanked the parliamentary 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 could have been more catastrophic,” the American president said on Friday in a solemn address from his Oval Office.

“Finding a consensus beyond partisan divisions is difficult. Unity is difficult. But we must never stop trying,” he added, echoing the message of reconciliation that had marked the start of his mandate, and which now marks his campaign for 2024.

Shared victory

Because the stakes of this financial confrontation were also very political.

Candidate for his re-election, Joe Biden knows that his first handicap is his age, 80 years.

He no doubt hopes that this soap opera on the debt, which has kept the American political and media world in suspense, 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 to consolidate his authority over a motley parliamentary group, between moderate conservatives and vociferous supporters of former President Donald Trump.

Also a candidate for the presidency of 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. Republicans are rejoicing to have pulled off a freeze on some spending; the Democrats congratulate themselves on having essentially preserved social benefits as well as major investments.

Life on credit

This combat, after all, austere around public finances, which had already taken place when Barack Obama was president, will probably not have a great effect on the 2024 election.

But it has left some traces: the agency of rating 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 all most developed economies, the United States lives on credit – and it has the heaviest debt in the world, in absolute terms.

But no other industrialized country stumbles like this, at intervals scheduled, on a hard debt ceiling, which Congress must raise.

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