PanamaTimes

Saturday, Sep 07, 2024

Joe Biden Warns Of "Catastrophic" Consequences On Economy If US Defaults

Joe Biden Warns Of "Catastrophic" Consequences On Economy If US Defaults

Biden has stated he wants a "clean" hike of the debt ceiling, but Republicans are insisting any extension of the country's borrowing authority.
President Joe Biden's administration again warned Sunday of "catastrophic" consequences for the US economy if the country defaults, as negotiations with Republicans over a debt deal are expected to resume in the week ahead.

Alarm bells are ringing over the possibility of a first-ever US default, with uncertainty over the actual date the government would stop being able to pay its bills.

Congressional Republicans are demanding budget cuts in exchange for lifting the so-called debt ceiling, while the White House has insisted for months that the nation's credit should not be up for negotiation.

The two sides have remained at an impasse despite weeks of warnings from government officials and bankers that a default could unleash drastic consequences, including a possible recession and likely global financial contagion.

Treasury Secretary Janet Yellen has warned a default could occur by June 1, while the nonpartisan Congressional Budget Office forecast on Friday the date of June 15.

"We shouldn't be here," Deputy Treasury Secretary Wally Adeyemo said Sunday on CNN's "State of the Union."

"If Congress failed to raise the debt limit by the time of default, we would go into a recession and it'd be catastrophic," he warned.

"The United States of America has never defaulted on it's debt -- and we can't."

Biden has stated he wants a "clean" hike of the debt ceiling, but Republicans are insisting any extension of the country's borrowing authority, currently capped at $31.4 trillion, come with substantial curbs on spending.

"It's time to bring spending levels back to pre-Covid, and then we can talk about raising the debt ceiling," Byron Donalds, a Republican representative from Florida, told FOX News on Sunday.

"If Joe Biden brings nothing to the table, if all he does is sit there with his hands in his pockets... then he's the one leading our nation into default."

Former president Donald Trump has encouraged Republican lawmakers to hold out for default if Biden doesn't agree to "massive cuts."

'Constructive' negotiations

A much-anticipated new round of debt-ceiling talks between Biden and Republican leaders, including House Speaker Kevin McCarthy, were postponed until the coming week.

Adeyemo acknowledged "constructive" negotiations were ongoing at the staff level, while pushing back on assertions that Biden does not want to address ballooning US debt.

"The president's laid out a plan that includes $3 trillion in debt relief over 10 years," Adeyemo said, referring to Biden's budget request unveiled in March, which featured tax increases on the wealthy and businesses.

Congressional leaders should address ways to hammer out a deal on fiscal policy, "but as we have that conversation, there is no reason we shouldn't raise the debt limit and prevent default in this country, a default that could lead to a massive recession that would cost us millions of jobs," he said.

Lael Brainard, director of the White House's National Economic Council, maintained that a deal would be reached.

"Our expectation is that Congress will do what is necessary" to avoid a default, Brainard, a former Federal Reserve vice chair, told CBS Sunday show "Face the Nation."

Biden addressed the issue on Saturday in Delaware, where he talked briefly to reporters.

"They're moving along," he said of the talks. But while there was "real discussion," he added the two sides were "not there yet."
Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
BRAZIL’S SUPREME COURT MINISTER ORDERS EXPLANATION ON X BLOCKING
Porn streamer OnlyFans paid owner $630mn in dividends
Donald Trump will not face sentencing over his 'hush money' conviction before the US presidential election on November 5, after a Manhattan judge granted his request to delay the proceeding
Return of Brazilian Artworks to Bahia
France Pilots Mobile Phone Ban in Schools
WHO-Led Study Finds No Link Between Mobile Phones and Brain Cancer
Kamala Harris is in Detroit and has a new accent again
EU Rejects Maduro’s Election Win Claim in Venezuela
Former Red Brigades Member Arrested in Argentina After 40 Years on Run
Elon Musk Accuses Brazilian Supreme Court Justice of Election Interference
Universe May Have Had a Pre-Big Bang 'Secret Life'
Ecuador's Narco Violence Threatens Scientists and Conservation Efforts
Brazilian Judge Alexandre de Moraes Blocks Elon Musk's X
Nаkеd American woman gropes security
Tsimane Tribe: Secrets to Health and Slow Ageing
OpenAI Blocks Iranian Group's ChatGPT Accounts for Election Interference
WHO Declares Mpox Global Health Emergency Again
Decline in World Records at Paris Olympics: An Analysis
EU Pressures Elon Musk Over Trump Interview
UN Reports Lowest Global Youth Unemployment Rate in 15 Years
Fatal Plane Crash Near Sao Paulo
Snoop Dogg: The Feel-Good Spirit of the Paris Olympics
McDonald's Worker Sets Restaurant On Fire Over Customer Frustration
Kamala Harris Confirmed as Democratic Candidate for US Presidential Election
Controversies at the Paris Olympics
Elon Musk Accepts Fight Challenge from Venezuelan President Nicolas Maduro
First Case of 'Virgin Birth' in Endangered Shark Species in Italy
G20 Fails to Reach Agreement on Global Billionaire Tax
Mexican Drug Lords El Mayo and El Chapo's Son Arrested in Texas
World's Hottest Day Recorded on July 21
Joe Biden Withdraws from 2024 US Presidential Race
A Week of Turmoil: Key Moments in US Politics
Global IT Outage Sparks Major Concerns
Global IT Outage Unveils Digital Vulnerabilities
Secret Service Criticized for Lack of Sniper Protection During Trump Shooting
Colombian Court Annuls Amazon Tribes’ Carbon Credit Deal
Sunita Williams Safe on ISS, to Address Earth on July 10
Biden Affirms Commitment To Presidential Race
Boeing Pleads Guilty Over 737 MAX Crashes
Beryl Storm Hits Texas, Killing 2 and Causing Major Power Outages
2024 Predicted to Be World's Hottest Year
Macron Faces New Political Challenges Despite Election Relief
Florida Man Arrested Over Attempt to Withdraw One Cent
Anger mounts at Biden’s top team after disastrous debate
Bolivian President Luis Arce Denies 'Self-Coup' Allegations
Steve Bannon Begins 4-Month Prison Sentence
Biden Warns of 'Dangerous Precedent' After Supreme Court Immunity Ruling in Trump Case
Elon Musk Accuses Kamala Harris of Misleading Post on Trump's Abortion Stance
Hunter Biden Sues Fox News Over 'Revenge Porn' Allegations
New York Times Editorial Board Urges Biden to Exit Presidential Race
×