The Joe Biden government again warned this Sunday of catastrophic consequences, including huge job losses, if the country defaults on its debt commitments, ahead of negotiations with Republicans to resume next week for a deal.
If Congress fails to raise the debt limit at the time of default, we would be in a recession and it would be catastrophic, Treasury Assistant Secretary Wally Adeyemo said on the Sunday talk show from CNN State of the Union.
For weeks, lawmakers, economic authorities, bankers and the White House have warned that the United States is on the brink of default, a move that could see the world’s largest economy The world falls into uncertainty with drastic consequences, including an impending recession and possible international financial contagion.
The Congressional Budget Office forecast Friday that the country could default on its debts by June 15 if lawmakers fail to reach deal with Biden to raise current spending caps.
We shouldn’t be at this point, Adeyemo said, repeating the administration’s call for lawmakers to end the partisan feud and raise the debt ceiling for the United States.
The United States has never defaulted on its debt, and we cannot, he stressed.
Biden has declared that he wants a clean increase in the debt ceiling , but Republicans insist that any extension of the country’s borrowing capacity, currently capped at $31.4 trillion, must be accompanied by substantial spending restrictions.
An expected new round of Talks on the matter between Biden and Republican leaders, including House Speaker Kevin McCarthy, have been postponed until next week.
Adeyemo acknowledged that the negotiations are constructive and progress on a personal level, but rejected Republican claims that Biden does not want to control federal spending. Biden budget presented in March.