Last update: 03 May 2023, 01:56 IST
Jean-Pierre said Biden was open to discussing a separate process to deal with budget cuts, but said the issue of the debt ceiling should be set aside entirely. (AFP file)
Treasury Secretary Janet Yellen warns government will run out of money and default on debt as early as June 1
President Joe Biden, Republicans and the US economy were on a disastrous collision course on Tuesday after the White House made clear it would not negotiate on extending the country’s debt limit.
Treasury Secretary Janet Yellen warns the government will run out of money and default on debt as early as June 1 if there is no authority to borrow more.
It would mean the inability to pay for everything from social programs to the military and – in a cataclysmic blow to global financial markets – the national debt.
Congressional leaders have been invited to meet Biden on May 9, next week.
Republicans, who control the House of Representatives, insist they will only extend the debt ceiling if Biden agrees to deep cuts to the federal budget first. That, says the White House, is a no-no.
“It is not an issue on which we will negotiate,” said press officer Karine Jean-Pierre.
Jean-Pierre said Biden was open to discussing “a separate process to deal with budget cuts,” but said the issue of the debt ceiling should be set aside entirely.
“It is the constitutional duty of Congress to prevent default,” she said. “Given the limited time available to Congress, it is clear that the only practical route to avoid default is for Congress to suspend the debt limit without conditions.”
The test of political will – often likened to a game of chicken against an oncoming train – comes just after Biden announced he would seek a second term in 2024.
A failure, triggering a default and potential economic chaos, would plunge the election into dangerous new territory for the 80-year-old, who is betting on a record rebuilding economy after the Covid-19 pandemic.
– ‘What changed?’ –
Debt limit extensions are usually an uncontroversial annual accounting maneuver that allows the government to pay for additional expenses already incurred.
However, Republicans – whose party has fallen under the sway of a far-right faction in the House – chose to use the issue as leverage in their broader bid to cut government spending and cut the deficit. .
House Republicans passed a bill spelling out exactly that — a combination of extending the debt ceiling in exchange for deep spending cuts across an array of government programs.
The bill has virtually no chance of passing the Democratic-led Senate and would be vetoed by Biden anyway. Jean-Pierre said Biden viewed the proposed Republican cuts as “unreasonable” and “dangerous.”
Asked repeatedly whether Biden will eventually have to give in to Republican demands in order to save the country from default, Jean-Pierre insisted that the blame lies entirely with Congress.
“It is the duty of Congress to ensure that this is done,” she said. “That’s a question for them.”
Jean-Pierre noted that Republicans in Congress supported three annual debt ceiling extensions with little opposition when Donald Trump was in office, before Biden.
” What changed ? she asks.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
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