United States avoids default as President Joe Biden signs crucial legislation

After several weeks of political confrontation, only his signature remained, which was beyond the shadow of a doubt. It’s done: the President of the United States, Joe Biden, promulgated, on Saturday June 3, the law which eliminates the risk of a default in payment by the United States.

The Democratic president thanked House officials, including Republican House Leader Kevin McCarthy, for their « collaboration » in this file, according to the press release from the White House published on Saturday.

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. Without this legislation, approved on Wednesday by the House of Representatives with a Republican majority and then Thursday in the Senate, with a Democratic 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”had said, Friday, the American president in a solemn address from the 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.

Each side claims a victory

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 hopes that this soap opera on the debt, which kept the American political and media world spellbound, reinforces an image of a competent and reasonable leader.

Joe Biden thus held on Friday at ” greet “ his most visible 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 vocal 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.

Ultimately, each side more or less claims victory. The Republicans are delighted to have torn off the freezing of certain expenses, the Democrats are pleased to have preserved essentially social benefits as well as major investments.

On account

This altogether austere fight 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 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 the country’s governance over the past fifteen 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 is forced to raise.