Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Joe Biden Warns Of "Catastrophic" Consequences On Economy If US Defaults

Joe Biden Warns Of "Catastrophic" Consequences On Economy If US Defaults

Biden has stated he wants a "clean" hike of the debt ceiling, but Republicans are insisting any extension of the country's borrowing authority.
President Joe Biden's administration again warned Sunday of "catastrophic" consequences for the US economy if the country defaults, as negotiations with Republicans over a debt deal are expected to resume in the week ahead.

Alarm bells are ringing over the possibility of a first-ever US default, with uncertainty over the actual date the government would stop being able to pay its bills.

Congressional Republicans are demanding budget cuts in exchange for lifting the so-called debt ceiling, while the White House has insisted for months that the nation's credit should not be up for negotiation.

The two sides have remained at an impasse despite weeks of warnings from government officials and bankers that a default could unleash drastic consequences, including a possible recession and likely global financial contagion.

Treasury Secretary Janet Yellen has warned a default could occur by June 1, while the nonpartisan Congressional Budget Office forecast on Friday the date of June 15.

"We shouldn't be here," Deputy Treasury Secretary Wally Adeyemo said Sunday on CNN's "State of the Union."

"If Congress failed to raise the debt limit by the time of default, we would go into a recession and it'd be catastrophic," he warned.

"The United States of America has never defaulted on it's debt -- and we can't."

Biden has stated he wants a "clean" hike of the debt ceiling, but Republicans are insisting any extension of the country's borrowing authority, currently capped at $31.4 trillion, come with substantial curbs on spending.

"It's time to bring spending levels back to pre-Covid, and then we can talk about raising the debt ceiling," Byron Donalds, a Republican representative from Florida, told FOX News on Sunday.

"If Joe Biden brings nothing to the table, if all he does is sit there with his hands in his pockets... then he's the one leading our nation into default."

Former president Donald Trump has encouraged Republican lawmakers to hold out for default if Biden doesn't agree to "massive cuts."

'Constructive' negotiations

A much-anticipated new round of debt-ceiling talks between Biden and Republican leaders, including House Speaker Kevin McCarthy, were postponed until the coming week.

Adeyemo acknowledged "constructive" negotiations were ongoing at the staff level, while pushing back on assertions that Biden does not want to address ballooning US debt.

"The president's laid out a plan that includes $3 trillion in debt relief over 10 years," Adeyemo said, referring to Biden's budget request unveiled in March, which featured tax increases on the wealthy and businesses.

Congressional leaders should address ways to hammer out a deal on fiscal policy, "but as we have that conversation, there is no reason we shouldn't raise the debt limit and prevent default in this country, a default that could lead to a massive recession that would cost us millions of jobs," he said.

Lael Brainard, director of the White House's National Economic Council, maintained that a deal would be reached.

"Our expectation is that Congress will do what is necessary" to avoid a default, Brainard, a former Federal Reserve vice chair, told CBS Sunday show "Face the Nation."

Biden addressed the issue on Saturday in Delaware, where he talked briefly to reporters.

"They're moving along," he said of the talks. But while there was "real discussion," he added the two sides were "not there yet."
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
×