For weeks, politicians, bankers and the White House have been warning that the United States is on the verge of a default that threatens serious consequences, including an impending recession and global financial contagion.
The Congressional Budget Office predicted on Friday that the country could default on its debt by June 15 if lawmakers fail to reach an agreement 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 “The State of the Union” on Sunday, echoing calls from lawmakers to end confrontation and expand the borrowing power of the United States.
“If Congress fails to raise the debt ceiling at the time of default, we will enter a recession and it will be catastrophic… The United States of America has never defaulted – and we can’t all just not allow us,” he added. .
Biden has called for the debt ceiling to be raised, but Republicans insist any expansion in borrowing power, which currently stands at $31.4 trillion, must come with significant debt restrictions. expenses.
A new round of debt ceiling talks between Biden and Republican leaders, including House Speaker Kevin McCarthy, have been postponed until next week.
Adeyou acknowledged the staffing negotiations were “constructive,” but dismissed Republican claims that Biden did not want to rein in federal spending.
“The president has presented a plan that includes $3 trillion 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 reach an agreement on fiscal policy, “but since we are in these talks, there is no reason why we cannot raise the debt ceiling and prevent defaults…(which) could lead to a massive recession that would cost us millions of jobs.”
“It’s time to get spending levels back to pre-Covid levels, and then we can talk about raising the debt ceiling,” Florida Republican Byron Donalds told Fox News on Sunday.
“If Joe Biden does not bring proposals to the table and he will just sit with his hands in his pockets (…) then he will be the one who will lead our country to default”, he said. added.
Former President Donald Trump encouraged Republican lawmakers to hold their ground if Biden did not agree to a “massive spending cut”.
But Lyle Brainard, director of the White House National Economic Council and former vice chairman of the Federal Reserve, confirmed that an agreement would be reached.
“We expect Congress to do what is necessary” to avoid a default, she told CBS’s “Face the Nation” program on Sunday.
On Saturday, Biden addressed the issue in Delaware, where he briefly addressed reporters, saying negotiations were underway and there was a “genuine discussion” but the two sides were not yet reached a solution.
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