US Treasury Secretary Janet Yellen warned in early May that the United States, which is the world’s largest economy, is threatening to default on its debts, starting from the beginning of June, if the issue of raising the debt is not resolved.
On Friday, US President Joe Biden accused his Republican opponents of taking the country’s economy “hostage” by refusing to agree to raise the public debt ceiling unless he adopts large budget cuts.
The Democratic president said he would tell congressional leaders when he meets with them on Tuesday that they should “do what every other Congress has done, which is raise the debt ceiling and avoid default.”
Congressional Republicans require that Biden initially agree to a significant reduction in budget expenditures, before they agree to raise the debt ceiling, a measure that will allow the government to borrow more money.
And US Treasury Secretary Janet Yellen warned in early May that the United States, which is the largest economy in the world, is threatening to default on its debts, starting from the beginning of June, if the issue of raising the debt is not resolved.
This poses a great risk to the United States, which has never found itself in default on its debt.
Raising the debt ceiling is usually routine and passed without controversy.
Biden said during an economic meeting on Friday that the Republicans “are trying to take the debt hostage to push us to agree to some unfair cuts.”
And the president, who is preparing next year to run for elections in pursuit of a second term in the White House, stressed his readiness to discuss imposing some restrictions on the budget, provided that raising the debt ceiling is not hostage to that.
“We can discuss (about) where we can cut, how much spending … but not under the threat of default,” he said, adding, “That’s why we have a budget track to discuss publicly.”
He stressed that his administration “is ready for this discussion… However, the last thing the country needs after all that we have gone through is a fabricated crisis, and this is what we are facing: a fabricated crisis from its beginning to its end.”
The administration warns that failure to raise the public debt ceiling will lead to Washington defaulting on its $31.4 trillion debt, in a historical precedent that would shock the United States and the world alike.