President Joe Biden and House Republican leader Kevin McCarthy are now in the midst of a new round of political boxing in which the solvency of the world’s largest economy is at stake.

One seeks to project the image of a protector of the workers and the middle class, while the other seeks to project the image of a guarantor of financial seriousness.

“The American people need to know what competing economic concepts we are talking about,” Joe Biden said Wednesday during a speech at a training center in eastern Maryland, referring to the leader of the Republican House of Representatives, who presented his plans to Wall Street on Monday. .

The American president declares himself opposed to the “trickle down economy” theory, according to which tax cuts on the wealthy and multinational corporations automatically benefit the popular classes by facilitating investment and the “diffusion” of wealth; he presents himself as a defender of industrial workers and trade unions.

“Do you think (Kevin McCarthy) told the rich and powerful that it was time to rise to the occasion and pay their fair share of taxes? Not a word,” added the octogenarian Democrat, calling for higher tax rates for the most privileged Americans.

“Did he tell multinationals to stop hiding their profits in tax havens and move jobs elsewhere? I haven’t heard anything like that,” he continued, further accusing the Republicans of wanting to cut social spending heavily.

“catastrophic”

The American president also accused the followers of Donald Trump of having set themselves the task of leading the US “to default if I do not accept their twisted ideas”, something “catastrophic”.

Kevin McCarthy responded to … compliments yesterday by reasoning almost simultaneously during a speech on Capitol Hill that the Democrats “have no right to play political games with a debt limit” and cementing their “extreme positions.”

He reaffirmed his plans to restore the level of federal government spending, which he considers uncontrollable, to the level of 2022 and limit its growth to 1% per year for the next ten years.

In return, the Republicans would agree to raise the “debt limit” for a specified period of time.

It’s about American specialty: The United States is the only advanced economy in the world where the parliament periodically calls for the government’s borrowing limit to be raised.

The famous $31.4 trillion “threshold” was reached in mid-January, and the US has so far avoided default thanks to temporary measures.

If Democrats and Republicans fail to reach an agreement, by summer the US could find itself in an unprecedented situation: unable to repay its debt obligations on time, which could potentially jeopardize the global economy.

Standard procedure for decades, this vote was turned into a bra de fer by the Republicans during the presidency of Barack Obama, but compromises have always been found. Still.

Will the same thing happen this time? The tone is raised by Joe Biden, who flatly refuses to negotiate terms for raising the “debt limit.”

He believes that the Republican Party is no longer “the party of our parents”, in particular, he accuses the American right of taking the extreme positions of Donald Trump.

Beyond US fiscal policy, there is obviously the 2024 presidential election and the intention of each side to advance its own economic and social vision.

The White House highlights Joe Biden’s track record in securing approval for a mammoth public investment program and the president’s middle-class image, contrasting that with that of Donald Trump, a billionaire born into a privileged world.

To highlight the difference, Joe Biden, who has yet to officially start his campaign, released his tax return yesterday Tuesday. Something that his predecessor in the White House, breaking decades of unwritten political tradition, refused and always refuses to do.

Source: RES-IPE