WASHINGTON, Oct 4 (Businesshala) – President Joe Biden said on Monday that the federal government could breach its $28.4 trillion debt limit in a historic default unless Republicans join Democrats in voting to increase it over the next two weeks. Doesn’t happen
Senate Republicans, led by Minority Leader Mitch McConnell, have twice blocked action to raise the debt limit in recent weeks – saying they want action but won’t help. Republicans say Democrats can use a parliamentary maneuver known as budget reconciliation to act alone. Top Democrats have rejected that view.
“Raising the debt limit comes down to paying off what we’ve already owed … nothing new,” Biden told a White House news conference.
Asked if he could guarantee that the United States would not breach the debt limit, the president replied: “No, I can’t. It’s up to Mitch McConnell.” He said he intends to speak with McConnell about the matter.
McConnell has been saying for months that Democrats should use budget reconciliation to get around the Senate’s filibuster rule, which requires 60 out of 100 members to agree at most to pass legislation. Senate Majority Leader Chuck Schumer, a Democrat, has denied that approach, and Biden on Monday urged Republicans not to use filibuster to block action.
“Just get out of the way,” Biden told Republicans. “If you don’t want to help save the country, get out of the way so you don’t destroy it.”
But Senator Joe Manchin, a moderate Democrat who has been with many in his party on other key issues, said Democratic leaders should not rule out using budget reconciliation to raise debt limits.
According to CNN reporter Manu Raju, who tweeted the senator’s comments, Manchin said, “Well, they shouldn’t rule out anything – we just can’t let the debt cap run out.”
Late last month the US House of Representatives passed and sent a bill to the Senate to suspend Treasury borrowing limits through the end of 2022.
Schumer said on Monday that the Senate would vote on a measure to suspend the debt limit later this week, the third time he has sought to bring it up.
Treasury Secretary Janet Yellen warned lawmakers last week that the United States government was close to exhausting its federal lending capabilities by October 18.
Failure to take action can have disastrous economic consequences. Moody’s warned last month that it could cause a nearly 4% drop in economic activity, the loss of nearly 6 million jobs, an unemployment rate near 9%, a sell-off in stocks that could wipe out $15 trillion in household assets. and increase in interest rates on mortgages, consumer loans and business loans.
Democrats voted to raise the debt limit during Republican Donald Trump’s administration, even though he opposed deep tax cuts in debt.
Biden said that during Trump’s four years in office, the US has taken on about $ 8 trillion in new debt, which is more than a quarter of the entire outstanding debt.
“Republicans in Congress raised the debt three times” under Trump, he said, with Democratic support.
Concerns over debt limits contributed to Monday’s fall in the stock market. Wall Street’s main indexes fell on Monday as investors shifted out of technology stocks on rising Treasury yields with concerns about US-China trade, Taiwan and debt limits at the forefront.
McConnell stuck to his guns on Monday.
“The majority needs to stop slumbering toward another preventable crisis. Democrats need to tackle the debt ceiling,” McConnell said on the Senate floor.
In an open letter to Biden, McConnell said Democrats do not need Republican cooperation to pass a bill to raise the debt limit. McConnell wrote, Democrats have received almost three months’ notice from Republicans regarding their position on the matter.
McConnell is known for standing his ground once he has taken a controversial position. For example, in 2016 he refused to allow a Senate hearing on the nomination of Merrick Garland to a seat on then-President Barack Obama’s Supreme Court — keeping the seat open until Trump assumed office nearly a year later.
Schumer said that if there is no progress on raising the debt limit, the Senate will have to be in session over the weekend and possibly a planned recess next week.
Last week, Senate lawmakers ruled that Schumer could use the budget reconciliation process to bring the debt ceiling bill to the Senate floor, according to a source familiar with the ruling.
According to the lawmaker, doing so would not jeopardize Democrats’ efforts to get the second bill on the Senate floor under reconciliation. It’s the multitrillion-dollar bill that bolsters Biden’s domestic agenda to expand social services and address climate change that Democrats are developing.