President Joe Biden has issued a warning that the United States economy could enter a recession and millions of jobs could be lost if Republicans do not agree to raise the country’s $31.4 trillion debt ceiling before a deadline that is fast approaching. In a campaign-style speech delivered on Wednesday, Biden accused Republicans of holding the economy hostage by demanding “devastating” spending cuts in exchange for raising the debt limit.
The President spoke at an event held in Valhalla, New York, which is located in a congressional district that Republicans narrowly won in the November mid-term elections. He urged Republicans to avoid risking a recession and millions of jobs, and to not undermine America’s standing in the world. Biden said, “We’re bringing jobs back all across America. This is no time to put all this at risk, to threaten a recession, to put at risk millions of jobs, to undermine America’s standing in the world.”
The Biden administration and congressional Republicans have been struggling to reach a consensus on raising or suspending the debt ceiling to prevent the US from defaulting on its debt within weeks. The US Treasury Department has stated that it may not be able to pay its bills as soon as June 1.
Republicans have insisted that they will only support raising the debt limit if Biden agrees to retroactive spending cuts, while the President wants to negotiate the budget separately. In April, House Republicans passed a plan that sought $4.5 trillion in deficit savings by cutting spending, scrapping tax breaks for clean energy, and reversing Biden’s plan to forgive student debt.
On Friday, Biden and congressional leaders are set to meet to discuss how to avert an impending default crisis after failing to reach a breakthrough earlier in the week. Last week, White House economists estimated that a prolonged default could cost up to 8 million jobs and wipe half the value off the US stock market.
Mitch McConnell, the top Republican in the Senate, has already assured the public that Congress would not allow a default to happen. He told reporters earlier this week, “The United States of America is not going to default.” However, the Democrats are urging Republicans to put aside their differences and agree on a solution to prevent a financial catastrophe.
