Joe Biden warns of disaster over Republicans’ debt limit refusal
Joe Biden has slammed Republicans as ‘reckless, dangerous and hypocritical’ for refusing to raise the US government debt limit.
Joe Biden has slammed Republicans as “reckless, dangerous and hypocritical” for refusing to raise the US government debt limit, painting a grim picture of potential economic disaster as the October 18th deadline for relaxing the limit approaches.
As the US President struggles to corral enough votes to pass his signature infrastructure spending bills, which have floundered in congress amid Democrat infighting over their size and scope, Mr Biden lashed Republicans from the White House on Monday, blaming Trump-era tax cuts for the borrowing surge.
Mr Biden said Republicans had raised the debt limit three times under Donald Trump’s presidency, and each time with Democrat support.
“But now they won’t raise it even though they are responsible for more than $8 trillion in bills incurred in four years under the previous administration,” he said, referring to an estimated revenue shortfall after the previous administration’s 2017 tax cuts.
“A meteor is headed to crash into our economy. Democrats are willing to do all the work stopping it. Republicans just have to let us do our job.
“If you don’t want to help save the country, get out of the way so you don’t destroy it.”
US Treasury Secretary Janet Yellen has repeatedly told congress that the limit must be raised by October 18 or the government would not be able to pay its bills.
A default on the debt could have catastrophic financial consequences, and the pressure on both parties to resolve the issue will likely grow as congress nears the deadline.
Mr Biden said a default would lead “to a self-inflicted wound that takes our economy over a cliff and risks jobs and retirement savings … it will threaten the reserve status of the dollar as the world’s currency that the world relies on”.
“American credit rating will be downgraded. Interest rates will rise for mortgages, auto loans, credit cards borrowing,” he said.
The limit has been raised 98 times since it emerged in 1917. A decade ago, a Republican-controlled congress almost caused former president Barack Obama’s administration to default, refusing to lift the ceiling beyond $US14.5 trillion until the last minute.
S&P later stripped the US of its AAA-rating for the first time, which it is yet to restore.
“The United States is a nation that pays its bills and always has. From its inception, we have never defaulted,” Mr Biden said.
Senate Democrat leader Chuck Schumer said a bill to lift the ceiling, which stands at US$28.5 trillion, must reach the President’s desk by the end of this week.
Republican Senate leader Mitch McConnell, in a letter sent to the President on Monday (Tuesday AEDT), urged the White House to “engage directly with congressional Democrats” on raising the debt ceiling, pointing out the ruling party could raise the limit on its own by using a time-consuming “reconciliation process”, which requires 50 votes in the Senate rather than the 60 votes required of most legislation.
Negotiations over the debt ceiling have occurred amid bitter Democrat division over the party’s plans, separately, to increase spending on education, climate change programs, healthcare – and myriad other schemes – by US$3.5 trillion over the next decade.
Two moderate Democrat senators have refused to support the plan, arguing total additional spending should be at most half of that amount, which has in turn infuriated the progressive wing of the party.
Pramila Jayapal, leader of the house progressives, conceded heading into the weekend that her camp was going to have to lower its top-line figure. She said there is “no number on the table yet that everyone has agreed to”, but that it would realistically land “somewhere between $US1.5 and $US3.5” trillion.
Former president Trump, who still wields considerable power within the Republican Party, blasted the spending plan in a statement. “The Democrat plan, if approved at any level, will push our Country towards socialism!” he said.
More Coverage
Navalny wrote he knew he would die in prison in new memoir
Alexi Navalny, Vladimir Putin’s top political opponent, tragically wrote ‘there will not be anybody to say goodbye to’ from prison in his posthumous memoir set to be released later this month.
Hezbollah fires at Israel as wars rage on Yom Kippur
Hezbollah launched a series of strikes at an Israeli military factory on the holiest day in the Jewish calendar, after the IDF ‘deliberately targeted’ UN peacekeepers working in Lebanon.