Biden Says He 'Can't' Guarantee US Won't Default on Debt
On Monday, President Joe Biden fired another salvo in an ongoing game of financial chicken between his administration and congressional Republicans, saying he could not guarantee the United States will not reach the debt ceiling.
“I can’t believe that will be end result because the consequence is so dire,” Biden said to reporters following a White House speech on the issue, according to Politico. “I don’t believe that. But can I guarantee it? If I could, I would, but I can’t.”
Last week, Treasury Secretary Janet Yellen warned lawmakers that Congress has until Oct. 18 to raise or suspend the debt ceiling before the U.S. will likely begin to default on its debt for the first time ever.
Republicans, led by Minority Leader Mitch McConnell, have said they won’t vote to raise the debt ceiling, saying that doing so will promote more government spending.
In a Monday morning letter to Biden, McConnell prodded the president to talk his party into raising the debt limit without any Republican support, a common tactic by the out-of-power party when it comes to the issue of raising the debt ceiling.
“I respectfully submit that it is time for you to engage directly with congressional Democrats on this matter,” McConnell wrote in the letter, which Biden indicated he had read. “Your lieutenants in Congress must understand that you do not want your unified Democratic government to sleepwalk toward an avoidable catastrophe when they have nearly three months’ notice to do their jobs.”
Republicans have threatened to filibuster any attempt by Senate Democrats to pass a simple bill to increase the nation’s ability to borrow more money.
Party leaders want to force Democrats to raise the limit on their own through the budget reconciliation process that bypasses a Republican filibuster, but that is not a realistic option, given such a process could take weeks to come to fruition.
In the letter, McConnell brought up Biden’s past opposition to debt increases while in the minority.
“The President’s party had to take responsibility for a policy agenda which you opposed,” he wrote. “Your view then is our view now.”
Biden put the onus on the impasse at the feet of the GOP and cast Democrats as the potential saviors of the nation.
“Republicans say they will not do their part to avoid this needless calamity,” Biden said in his speech. “So be it. But they need to stop playing Russian roulette with the U.S. economy.
“Let the Democrats vote to raise the debt ceiling this week, without obstruction or further delays.”
That theme was continued throughout the president’s 18 minute appearance.
“What they’re doing today is so reckless and dangerous in my view,” he said. “Not only are Republicans refusing to do their job. They’re threatening to abuse the power, their power, to prevent us from doing our job — saving the economy from a catastrophic event.”
“I think, quite frankly, it’s hypocritical, dangerous and disgraceful. Their obstruction and irresponsibility knows absolutely no bounds,” he added.
Even before the debt ceiling limit is reached later this month, Biden said the consequences of the ongoing standoff could be dire.
“In the days ahead, even before the default date, people may see the value of their retirement accounts shrink. They may see interest rates go up, which will ultimately raise their mortgage payments and car payments, and… your savings in your pocketbook could be directly impacted by this Republican stunt,” he said. “It’s as simple as that.”
The conventional wisdom is that failure to increase or suspend the debt ceiling would roil financial markets and imperil the U.S. economy’s nascent recovery from the COVID-19 downturn.
When the ceiling is reached, the U.S. Treasury Department can’t issue any more Treasury bills, bonds or notes. It can only pay bills as it receives tax revenues.
Failure to raise or suspend the debt ceiling by mid-October would make it impossible for the federal government to maintain all of its financial obligations.
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