Joe Biden enacted the law that avoids the default of the United States

After weeks of political confrontation, the president Joe Biden signed on Saturday the law that eliminated the risk of non-payment of the debt of USA.

This week Congress passed “Fiscal Responsibility Law of 2023″which suspends the ceiling on US public debt until January 2025 and also sets certain budget targets.

Without this legislation, approved on Thursday by the Senate, with a Democratic majority, and on Wednesday by the House of Representatives, with a Republican majority, the world’s largest economy ran the risk of not being able to meet its debt commitments from Monday.

“Nothing would have been more irresponsible or more catastrophic”the president said in his speech on Friday.

“Finding a consensus across partisan differences is difficult. Unity is hard, but we must never stop trying”, he added, repeating the message of reconciliation that marked the beginning of his term, and is now the slogan of his campaign for 2024.

The stakes in this financial confrontation were also highly political.

As a re-election candidate, Biden knows that his first handicap is his age, 80 years old. He now hopes that he solved this problem that he had to USA to a tris of an embarrassing default, its leadership is reinforced.

Biden also had words of “greeting” to the Republican head of the House of Representatives, Kevin McCarthy, his main opponent in the negotiations.

For McCarthy, it was about cementing his authority over a ragtag parliamentary group, ranging from moderate conservatives to ardent supporters of former President Donald Trump.

Also a presidential candidate for 2024, Trump fought to apply a strong hand in the negotiations with the White House.

In the end, each side claims to have won something. The Republicans are satisfied because they managed to freeze some expenses, for having preserved the bulk of social benefits and large investments.

This battle over public finances, which already occurred when Barack Obama was president, is unlikely to make much of an impact on the 2024 election, but it left its mark.

Rating agency Fitch kept the US’s prized AAA rating on review, deploring “political polarization” and noting “a steady deterioration in governance over the past 15 years.”

Like almost all developed economies, the United States lives on credit and, in absolute terms, has the largest debt burden in the world.

But no other industrialized country regularly faces a rigid debt ceiling that Congress must raise.

Source: AFP