Biden chides Republicans for refusing to lift debt ceiling, warns of economic catastrophe
President Biden chides Republicans for refusing to raise the debt ceiling and warns of serious consequences if Congress fails to do so.
President Biden on Monday criticized Republicans for not voting to raise the debt ceiling, accusing them of being “reckless and dangerous” in a way that could harm the economy.
“Not only are Republicans refusing to do their job, they’re threatening to use [the filibuster] to prevent us from doing our job — saving the economy from a catastrophic event,” Biden said during a speech at the White House.
The Democrat-controlled House last week passed legislation that temporarily suspends the debt ceiling. Senate Republicans, however, have said they will not vote to approve such a measure. Biden said the Republicans’ stance is “hypocritical, dangerous and disgraceful.”
“Especially as we’re clawing our way out of this pandemic,” Biden said.
“We’re not expecting Republicans to do their part,” Biden said. “We tried asking to no avail. We’re just asking to not use [the filibuster] to block us from doing the job they won’t do.”
The Treasury would have to default on some government bills, possibly including checks to investors and retirees.
Republicans argue that if Democrats want to govern alone — by trying to enact Biden’s “Build Back Better” plan through a legislative process that prohibits a GOP filibuster — they will have to raise the debt limit on their own.
“Republicans’ position is simple. We have no list of demands,” Senate Minority Leader Mitch McConnell (R-Ky.) wrote to Biden on Monday. “For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”
Biden said he expected to speak with McConnell about the letter.
“He and I have been down this road once before,” Biden told reporters after his speech.
When asked if he could guarantee the U.S. would not default on its debt, Biden said he could not.
“That’s up to Mitch McConnell,” Biden said.
But even amid uncertainty, Biden said he could not “believe that will be the end result because the consequences would be so dire.”
“I don’t believe it,” Biden said. “But can I guarantee it? If I could, I would. But I can’t.”
Raising the debt limit allows the federal government to continue to cover debt it has already undertaken, not future spending. The United States has never defaulted on its debts, even amid heightened partisan squabbling.
Senate Republicans have insisted that Democrats have enough votes to raise the ceiling through reconciliation, a filibuster-proof process that requires a simple majority in Senate. If all Democrats and two independents back such a bill, Vice President Kamala Harris can break the tie and put the bill on Biden’s desk.
But Biden warned that reconciliation is “fraught with all kinds of potential danger for a miscalculation. It’s an incredibly complicated, cumbersome process.”
The move keeps the government funded through Dec. 3.
The process allows for two sets of unlimited amendment votes. The minority party typically uses the “vote-a-rama” to box the majority party into taking politically perilous votes.
Republicans “need to stop playing Russian roulette with the U.S. economy,” Biden said. “Let us vote and end the mess.”
Once the Treasury Department runs out of cash, payments to government workers, including military personnel, veterans and Social Security recipients would likely be delayed. A default would also affect taxpayers.
“Savings in your pocketbook could be directly impacted by this Republican stunt,” Biden said.
Treasury Secretary Janet Yellen previously said the department would run out of “emergency measures” to pay the nation’s debts on Oct. 18. The limit on federal borrowing is currently $28.4 trillion.
A U.S. default would not only upend global markets but imperil America’s economy, likely causing unemployment rates to jump to 9%, experts have warned. Even waiting to the last minute to raise the limit “can cause serious harm to business and consumer confidence, raise borrowing costs for taxpayers, and negatively impact the credit rating of the United States for years to come,” Yellen wrote last week in a letter to congressional leaders.
Fitch Ratings on Friday warned that if the debacle over the debt limit is not resolved in a “timely manner,” it would be forced to downgrade the nation’s AAA credit rating.
Senate Majority Leader Charles E. Schumer (D-N.Y.) on Monday told Democrats that a measure addressing debt limit must be on Biden’s desk by the end of this week.
During his remarks, Biden sought to decouple the debt limit showdown and negotiations over his economic agenda, emphasizing that the ceiling needs to be raised to pay for spending that has already been authorized, not future plans.
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But after finishing remarks, Biden also fielded questions about the latest talks involving infrastructure and social spending legislation.
House Democrats on Thursday did not advance an infrastructure measure, which would upgrade roads, bridges and water pipes, because a deal could not be reached on a more expensive proposal that would expand safety net programs.
Sens. Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Ariz.) have withheld their support for the spending bill, creating a stalemate.
Still, Biden was confident that he was making progress.
“I need 50 votes in the Senate,” Biden said. “I have 48.”
“This is a process,” he said. “We’ll get it done.”
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