President Joe Biden on Monday urged House Speaker Kevin McCarthy not to default on public debt, warning it would send credit card and mortgage rates skyrocketing.
“America is not a debtor country. We have never, ever failed to pay the debt,” Biden said at a White House small business event, adding that the default position of some congressional Republicans was “absolutely irresponsible” and dangerous.
“It will lead to higher interest rates, higher credit card rates, higher mortgage rates,” Biden said. “The most urgent thing we can do is ensure the long-term strength of our economy and our financial system. The most important thing we need to do in this regard is for the Speaker of the House of Representatives to stop threatening to default on the national debt.
Speaker of the House of Representatives Kevin McCarthy. May 1, 2023
Recall that the House of Representatives last week passed a bill that increases the public debt ceiling by $31.4 trillion by an additional $1.5 trillion. The bill also includes massive spending cuts over the next decade.
The bill is not expected to receive Senate approval.
If Congress takes no action, the Treasury Department could run out of funds to pay the bills within weeks, and financial markets are already giving warning signals.
Speaking during a visit to Jerusalem, McCarthy said he was concerned about the national debt ceiling, but the only way to solve the problem was to negotiate with Biden.
Democrats are pushing for an unconditional increase in the national debt ceiling.
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