2023-05-02 23:07:57
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Washington (AFP) – President Joe Biden, the Republicans and the US economy went on a collision course Tuesday after the White House stressed that it will not negotiate to extend the government’s debt limit.
Treasury Secretary Janet Yellen has warned that the government will run out of money and default on its debts as soon as June 1 if there is no authorization for new loans.
That would prevent the government from paying for everything from social programs to the military and, in what would be a catastrophic blow to global financial markets, the national debt.
Congressional leaders were invited to meet with Biden next Tuesday.
Republicans, who control the House of Representatives, insist they will extend the debt limit if Biden first agrees to cut the federal budget. The White House has repeatedly said no.
“This is not an issue that we will negotiate,” White House press secretary Karine Jeane-Pierre said.
He assured that Biden is willing to discuss “a separate process to address budget cuts,” but said the debt ceiling issue should be left out entirely.
“It is a constitutional duty of Congress to avoid default,” he said. “Given the short time Congress now has, it is clear that the only practical way to avoid default is for Congress to unconditionally suspend the debt limit,” she said.
The political pulse comes just after Biden announced that he will seek a second term in 2024.
The failure of the negotiations would prevent the United States from honoring its debt commitments, cause possible economic chaos and take the elections into dangerous new territory for the 80-year-old president, who is betting on rebuilding the economy after the covid pandemic. -19.
“What has changed?”
Debt limit extensions are generally an uncontroversial annual accounting maneuver that allows the government to pay for additional expenses already incurred.
However, Republicans, who have fallen under the influence of a far-right faction in the House, chose to use the issue as leverage to cut public spending and reduce the deficit.
In the House of Representatives, where they have a slim majority, Republicans approved a bill that would allow more borrowing in exchange for sharp spending cuts. That project has no chance of being approved in the Senate, where the Democrats are in the majority.
Asked if Biden will eventually cave in to Republican demands to prevent the world’s largest economy from defaulting, Jean-Pierre insisted that the responsibility lies with Congress.
“It is the duty of Congress to do that,” he said.
Jean-Pierre noted that Republicans in Congress endorsed three annual debt limit extensions with little opposition when Donald Trump was in power, before Biden. “What has changed?” he wondered.
© 2023 AFP
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