U.S. President Joe Biden has warned of the dire consequences of a possible default by the U.S. government on its debt obligation as early as June 1.
Speaking at SUNY Westchester Community College in New York on Wednesday, Biden said the U.S. economy would fall into recession with 8 million Americans losing their jobs, and its international reputation would be damaged in the extreme in the case of a debt default.
“If we default on our debt, the whole world is in trouble,” said Biden.
Americans would face higher interest rates for credit cards, car loans, mortgages and payments for social security, Medicare, troops, and veterans could all be halted or delayed, said Biden.
Biden, a moderate Democrat, blamed the so-called MAGA Republicans in the Congress for the “manufactured crisis,” saying there’s no question about U.S. ability to pay its bills.
Biden and Congressional leaders are set to meet again on Friday to negotiate a budget for fiscal year 2024, which is intertwined with the debt ceiling issue.
The first meeting between Biden and four Congressional leaders on Tuesday failed to generate meaningful breakthroughs.
The Democrats and Republicans are still jockeying for position prior to an anticipated intense showdown in the coming weeks.
In January, the United States hit its 31.4-trillion-U.S.-dollar debt limit, set in December 2021, prompting the Treasury Department to use accounting maneuvers known as “extraordinary measures” to keep the government paying its bills, such as curbing certain government investments.