A series of meetings at the White House, in small or large committees, endless negotiating sessions… the whole Washington has been suspended for weeks from the fate of the “debt ceiling” and the risk of a default on payment by the States -United. After weeks of negotiations, America can breathe: by a vote, the American Congress lifted the debt ceiling on Thursday, June 1 and dismissed, within a few days, the threat of bankruptcy.

“A default would have caused severe hardship for American families, potentially resulting in the loss of millions of jobs and trillions [of dollars] of household wealth,” Treasury Secretary Janet Yellen said in a statement. press release, “delighted” with this vote.

America, like almost all major economies, lives on credit. But unlike other developed countries, the United States regularly comes up against a legal constraint: the debt ceiling, its maximum amount of indebtedness, which must be formally raised or suspended by Congress. From this routine legislative procedure, the Republicans, the majority in the House of Representatives and their boss Kevin McCarthy, have made an instrument of political pressure against Democratic President Joe Biden.

Although it is very common for last-minute agreements to be reached on this type of file, these endless negotiations have prompted the rating agency Fitch to place the United States’ AAA rating “under review”. .

“A great victory for the American people”

Saturday evening, in the middle of the long holiday weekend, the two parties finally snatched an agreement with forceps. This text has made it possible to avoid the worst: that the country’s coffers will run dry on Monday, June 5, as the Treasury feared. Overnight, the United States would have had the greatest difficulty in honoring its financial commitments, whether in terms of salaries, pensions or reimbursements to their creditors, and would have been forced to make drastic choices. This unprecedented situation would have plunged into the unknown the American finance and economy but also, by extension, international.

It is to avoid this scenario with potentially catastrophic repercussions that Democratic President Joe Biden and Republican House of Representatives boss Kevin McCarthy reached this compromise. The agreement had already been approved Wednesday evening by a large majority of elected members of the House of Representatives.

Joe Biden applauded Thursday’s Senate vote “It’s a great victory for the economy and for the American people,” he said, saying he was “eager” to enact the text.

Promise to limit certain expenses

Concretely, the text makes it possible to suspend for two years, therefore until after the presidential and legislative elections of 2024, the maximum amount of indebtedness of the United States, currently at 31,400 billion dollars. In exchange, Democrats agreed to limit some spending, but not as much as Republicans wanted. That is why many of them opposed the measure, both in the House and in the Senate.

“Make no mistake, there is still a lot to be done” to clean up American finances, assured the Republican tenor in the Senate, Mitch McConnell.

A big point of contention for the left, the compromise includes modifications to the conditions imposed to benefit from certain social aid. “I cannot, in my soul and conscience, vote for a bill that harms working people,” influential Senator Bernie Sanders said.