Biden warns of recession unless GOP agrees to raise debt ceiling
The US president accuses Republicans of holding the economy hostage by demanding spending cuts to raise the debt limit.
US President Joe Biden has warned that the economy could slide into recession, cutting millions of jobs unless Republicans agree to raise the $31.4 trillion debt ceiling before a fast-approaching deadline.
In a campaign-style speech in a New York state swing district on Wednesday, Biden accused Republicans of holding the economy hostage by demanding “devastating” spending cuts in exchange for raising the debt limit.
“We are bringing jobs back across America,” Biden said at an event in Valhalla, New York, home to a congressional district that Republicans narrowly won in the November midterm elections.
“Now is not the time to risk all this, to threaten a recession, to risk millions of jobs, to undermine America’s position in the world.”
The Biden administration and Republicans in Congress have struggled to agree on raising or suspending the debt ceiling to prevent the US from defaulting within weeks.
The U.S. Treasury Department has indicated it may not be able to pay its bills by June 1.
Republicans have insisted they will only support raising the debt limit if Biden agrees to retroactive cuts, while the president wants to negotiate the budget separately.
In April, House Republicans approved a plan to achieve $4.5 trillion in deficit savings through spending cuts, removing clean energy tax breaks and reversing Biden’s plan to cancel student debt.
Biden and congressional leaders will meet Friday to discuss how to avert a looming default crisis after failing to make a breakthrough earlier this week.
Last week, White House economists estimated that a prolonged bankruptcy could cost up to 8 million jobs and wipe out half the value of the US stock market.
Mitch McConnell, the top Republican in the Senate, assured earlier this week that Congress would not allow bankruptcy to happen, telling reporters, “The United States of America will not go bankrupt.”