Biden has asked to increase the debt ceiling, but Republicans insist that any expansion of the borrowing authority, which currently stands at $31.4 trillion, must be accompanied by significant spending restrictions.
President Joe Biden’s administration has again warned of “catastrophic” consequences for the US economy, including huge job losses if the country defaults, while negotiations for a debt ceiling deal are expected to resume next week.
For weeks, politicians, bankers and the White House have been warning that the US is on the verge of a default that threatens dire consequences, including a looming recession and a global financial contagion.
The Congressional Budget Office predicted Friday that the country could default on its debt by June 15 if lawmakers fail to agree with Biden to lift existing restrictions on government spending.
“We shouldn’t be here,” Deputy Treasury Secretary Wally Ademo said on a CNN talk show titled “State of the Union,” repeating lawmakers’ calls to end confrontation and expand US borrowing power.
“If Congress fails to raise the debt ceiling by the time of default, we will go into a recession and that will be catastrophic… The USA has never defaulted – we just can’t afford to do that,” he added.
Biden has asked to increase the debt ceiling, but Republicans insist that any expansion of the borrowing authority, which currently stands at $31.4 trillion, must be accompanied by significant spending restrictions.
A new round of debt ceiling talks between Biden and Republican leaders, including House Speaker Kevin McCarthy, has been postponed until next week.
Adeyou acknowledged that the personnel negotiations were “constructive,” but dismissed Republican assertions that Biden did not want to rein in federal spending.
“The president has laid out a plan that includes three trillion dollars in debt relief over ten years,” he said, referring to Biden’s budget request unveiled in March.
He added that congressional leaders should find ways to strike a deal on fiscal policy, “but since we’re in these talks, there’s no reason why we can’t raise the debt ceiling and prevent defaults… (which) could lead to a massive recession that would cost us millions of jobs.”
