The US President signed the law.
(Photo: IMAGO/UPI Photo)
Washington With his signature, US President Joe Biden has finally averted an impending insolvency of the US government. Biden signed legislation temporarily suspending the federal debt ceiling on Saturday, the White House in Washington said.
Congress had previously voted in favor of the project after a long and bitter struggle to reach a bipartisan compromise. Biden took the agreement as an opportunity to invoke cooperation between Democrats and Republicans.
The law, which can now go into effect with Biden’s signature, provides for the debt ceiling to be suspended until 2025. It was last at around 31.4 trillion dollars (about 29.1 trillion euros). At the same time, government spending will be limited over the next two years.
The deal effectively freezes the size of the federal budget that the Democrats under Biden wanted to increase. The budgets of many federal agencies and ministries are being adjusted for this.
Without this law, the government would have run out of money on Monday, according to the Ministry of Finance. A default by the world’s largest economy could have triggered a global financial crisis.
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Many Democrats and Republicans alike are dissatisfied with the deal. In view of the threatening dramatic consequences, however, enough members of Congress from both camps ultimately voted in favor of the deal and thus secured the necessary majority in Parliament.
Biden’s first address to the nation from the Oval Office since taking office
With a highly symbolic appearance, Biden celebrated the averting of the default on Friday evening (local time) and warned that in dramatic situations like this there is no way around non-partisan cooperation. “It couldn’t have been more at stake,” the Democrat said in an address to the nation from the Oval Office at the White House. “We prevented an economic crisis and an economic collapse.”
It was Biden’s first official address to the nation from the Oval Office since taking office almost two and a half years ago. Such speeches from the President’s office at government headquarters, broadcast live on US prime-time television, are a rarity and are usually reserved for major situations and crises. Biden now used the special stage to give the all-clear after weeks of invoked catastrophe scenarios and to strike a conciliatory tone despite the upcoming presidential election campaign in a politically deeply divided country.
Our economy would have been thrown into recession. US President Joe Biden
The US Congress averted the government’s inability to pay at the last minute by passing the debt law on Thursday. In the USA, the parliament sets a debt ceiling at irregular intervals and thus determines how much money the state can borrow.
Biden once again described what a cliff the United States narrowly avoided: “Our economy would have been plunged into recession,” he said. “Eight million Americans would have lost their jobs.” The country’s creditworthiness would have been destroyed. “It would have taken years to get out of this hole.”
Biden specifically thanks McCarthy
Biden specifically thanked the Republican Speaker of the House of Representatives, Kevin McCarthy, with whom he had personally negotiated a compromise in various rounds of negotiations. McCarthy and he got along well, were direct and honest with each other, and both sides kept their word. In the political climate in the USA, in which Democrats and Republicans – especially on the fringes of both parties – are sometimes downright hostile towards each other, such tones are now rare.
Working together across party lines is difficult, Biden said, but emphasized: “We must never stop trying. Because in situations like this, which we have just faced, in which the American economy and the world economy are threatening to collapse, there is no other way.” No matter how great the differences in substance are – the parties should not see each other as opponents, but as fellow citizens. They must treat each other with respect and work together for the good of the country.
Referring to the compromise, he said, “Nobody got everything they wanted, but the American people got what they needed.”
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