Biden says Republican obstruction of debt ceiling risks US default
WASHINGTON, Oct.4 (Reuters) – President Joe Biden on Monday said the federal government could exceed its $ 28.4 trillion debt limit in a historic default unless Republicans join Democrats in voting for increase it in the next two weeks.
Senate Republicans, led by Minority Leader Mitch McConnell, have twice blocked action to raise the debt ceiling in recent weeks, saying they want action but will not help by voting for this decision. Republicans say Democrats can use a parliamentary maneuver known as budget reconciliation to act on their own. The best Democrats have rejected this approach.
“Raising the debt limit is like paying what we already owe… nothing new,” Biden said at a White House press conference.
When asked if he could guarantee that the United States would not exceed the debt ceiling, the President replied, “No, I can’t. It depends on Mitch McConnell.” He said he intended to speak with McConnell about it.
McConnell has said for months Democrats should use the budget reconciliation process to get around the Senate filibuster rule, which requires 60 of 100 members to agree to pass most laws. Senate Majority Leader Chuck Schumer, a Democrat, declined to use this approach, and Biden pleaded Monday for Republicans not to block action with filibuster.
“Just walk away,” Biden told Republicans. “If you don’t want to help save the country, stay away so you don’t destroy it.”
But Sen. Joe Manchin, a moderate Democrat who has disagreed with many in his party on other major issues, said Democratic leaders should not rule out using budget reconciliation to raise the cap on the debt.
“Well, they shouldn’t rule anything out – we just can’t let the debt ceiling expire,” Manchin said, according to CNN reporter Manu Raju, who tweeted the senator’s comments.
“PREVENTABLE CRISIS”, SAYS MCCONNELL
Calling the default a “preventable crisis,” McConnell was adamant. “Democrats must tackle the debt ceiling,” he told the Senate.
In an open letter to Biden, McConnell reiterated that Democrats do not need Republicans’ cooperation to pass a bill to raise the debt ceiling. Democrats have known the Republican position for three months, McConnell wrote.
At the end of last month, the United States House of Representatives passed and sent to the Senate a bill to suspend the limit on Treasury borrowing until the end of 2022.
Schumer tabled a closure motion on Monday, which ends debate, on a measure that would allow the debt limit to be extended. The Senate is likely to vote later this week, the third time Schumer has put the issue to a vote.
Treasury Secretary Janet Yellen last week warned lawmakers that the United States government would exhaust its federal borrowing capacity around October 18.
Failure to act could have catastrophic economic consequences. Moody’s warned last month that the default could lead to a nearly 4% drop in economic activity, the loss of nearly 6 million jobs, an unemployment rate of nearly 9%, a sell-off in stocks that could wipe out $ 15 trillion in household wealth and spike interest rates on mortgages, consumer loans and corporate debt.
Concerns about the debt ceiling helped push the stock market down on Monday. The main Wall Street indices fell.
Democrats voted to increase the debt ceiling during the administration of Republican President Donald Trump, even though they opposed significant tax cuts that made the debt worse.
Biden said the United States had accumulated nearly $ 8 trillion in new debt over Trump’s four years in office, more than a quarter of total debt outstanding.
“The Republicans in Congress have increased the debt threefold” under Trump, he said, supported by the Democrats.
Schumer said the Senate will have to remain in session throughout the weekend and possibly in a scheduled hiatus next week if no progress is made on raising the debt limit.
Reporting by Susan Cornwell, Richard Cowan and Jarrett Renshaw; additional reporting by David Morgan, Jeff Mason, Steve Holland, Diane Bartz, Eric Beech and Makini Brice; Editing by Scott Malone, Mark Porter, Grant McCool and Cynthia Osterman
Our Standards: The Thomson Reuters Trust Principles.