In an unusual speech in the Oval Office, President Joe Biden said, this Friday (2), that he will sign on Saturday (3) the bill authorizing the increase in the United States debt limit, thus eliminating the threat “ catastrophic” of a default of the world’s largest economy.
On prime-time television and behind his historic desk, Biden assured, live and on national television, that the bipartisan agreement was a compromise in which “no one got what they wanted.”
“Finding consensus beyond partisan differences is difficult. Unity is difficult, but we must never stop trying,” the 80-year-old Democrat said in his brief address.
Without an agreement, the United States ran the risk of going into default, failing to pay its obligations as of Monday, June 5, the deadline established by the Treasury.
That would likely trigger market panic, huge job losses and a recession, with worldwide implications.
“Nothing would have been more irresponsible and catastrophic,” said the president.
In the United States, presidents have always reserved Oval Office speeches for moments of grave danger or of national importance.
However, even if the House of Representatives and the Senate had put aside their differences and reached a last minute agreement, the reputation of the US economy was damaged.
The credit rating agency Fitch maintains the negative outlook for the “AAA” credit rating of the United States. This classification should only be reviewed in the third quarter of 2023.
The agency said in a statement that it assesses “all the implications of the most recent episode of risky policies and the medium-term outlook for fiscal and debt trajectories”.
– Tough negotiations –
This week, the United States Congress approved the bill that suspends the country’s federal debt ceiling until January 2025, long enough to pass through the 2024 presidential race without a new arm wrestling.
In addition, it establishes certain limits for federal spending and provides for a cut of 10 billion dollars (R$ 49.5 billion) in resources destined to the tax authorities for modernization and intensification of controls.
Biden, who will seek re-election in 2024, sees the dramatic resolution of this political crisis as a victory, as it demonstrates his negotiation skills.
The president used the occasion to project a tone of confidence and calm. In a speech seasoned with laughter and smiles, Biden praised his opponents for negotiating in good faith and confessed to Americans that he had never felt more optimistic.
Congress, continued the representative, now preserves “the complete faith and credit of the United States”.
The decision is the result of weeks of arduous negotiations between Biden and Republican House Speaker Kevin McCarthy. Democrats accused their opponents of holding the US economy “hostage” by insisting on spending cuts to accompany the increase in the debt ceiling.
In his speech, Biden praised McCarthy, a politician loyal to former President Donald Trump, whom Biden defeated in 2020 and who wants to return to the presidency in 2024.
“I want to praise the ‘Speaker’ [presidente da Câmara] McCarthy. You know, he and I, we and our teams, we managed to get along, get things done,” Biden said, while calling the Republican negotiators “completely honest and respectful of each other.”
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