Biden signs law
US budget dispute comes to an end after weeks
6/4/2023 3:39 am
It is a compromise at almost the last second: the debt limit in the USA is suspended and the corresponding law has been signed. This allows Democrats and Republicans to avert massive economic damage to the United States.
US President Joe Biden has signed into law the hard-won compromise in Congress to prevent the government from defaulting. Biden recently signed the relevant law into law. Earlier, in a speech to the nation, he emphasized the importance of unity between his Democrats and Republicans. The almost last-minute compromise saved the country from “economic collapse,” he said.
“Nothing would have been more irresponsible, nothing would have been more catastrophic,” said Biden on Friday evening (local time) in his speech in the Oval Office of the White House about the default, which would have occurred without the agreement in the US Congress. “We averted an economic crisis and an economic collapse.” The hurdles in the dispute “could not have been higher”.
After the House of Representatives, the Senate also agreed on Thursday evening (local time) that the debt brake would be suspended until early 2025, i.e. until after the presidential elections. In return, cuts in government spending are planned for the next two years.
The compromise had been fought hard between Democrats and Republicans. After Biden signed the relevant legislation, the White House expressly thanked the majority leaders of both parties in Congress “for their partnership”. “Nobody got everything they wanted,” the President commented on the outcome of the negotiations in his speech to the nation. “But the Americans got what they need.”
“Finding a consensus across the rifts between the parties is difficult,” Biden said. “But we must never stop trying.” After weeks of tugging in the debt dispute, Biden, who wants to run again in the 2024 presidential election, warned: “Without unity there is no peace.” Without the suspension of the debt limit, the world’s largest economy would have been threatened with insolvency for the first time in its history from Monday. The consequences would have been panic on the stock markets, job cuts and a US recession with global repercussions.
Limit already reached in January
The USA had already reached the statutory debt limit of 31.4 trillion dollars (around 29.4 trillion euros) in January. Since then, the government has used so-called extraordinary measures to prevent a default. In the meantime, however, the possibilities were almost exhausted.
To underscore the importance of the deal, Biden delivered his brief address to the nation at his desk in the White House Oval Office. It was broadcast live on television during prime time. Traditionally, US Presidents only give speeches in the Oval Office when there is an extraordinary danger to the country or on other important occasions. Biden spoke in a deliberately calm and friendly manner and kept smiling at the camera. At the same time, he used the speech to renew his promise to tax the rich in the country more heavily.
Biden praised that his political opponents had negotiated with good intentions and “completely honestly”. He assured citizens that he had never been more confident. The compromise provides for some government spending to be frozen. However, the Republicans were not able to push through their demands for significant spending cuts.
Republican Speaker of the US House of Representatives Kevin McCarthy tried to sell the compromise as a major Conservative victory. However, he was criticized by his party’s right-wing hardliners for making too many concessions to the Democrats.
Biden, on the other hand, was able to distinguish himself as a moderating mediator in an increasingly polarized political landscape. McCarthy and he are “able to get along, to get things done,” the US President emphasized.