President Joe Biden said Monday that the federal government could breach its $ 28.4 trillion debt limit in a historic default unless Republicans join Democrats in voting to raise it in the next two weeks.
Senate Republicans, led by minority leader Mitch McConnell, have twice blocked action to raise the debt ceiling in recent weeks, saying they want action but will not help by voting on the measure. Republicans say Democrats can use a parliamentary maneuver known as budget reconciliation to go it alone. Major Democrats have rejected that approach.
“Raising the debt limit comes down to paying what we already owe … is nothing new,” Biden told a news conference at the White House.
When asked if he could guarantee that the United States would not violate the debt limit, the president responded: “No, I cannot. That’s up to Mitch McConnell. ”He said he intended to speak with McConnell about the matter.
McConnell for months has said Democrats should use the budget reconciliation process to get around the Senate’s obstructionist rule, which requires 60 out of 100 members to agree to pass most laws. Senate Majority Leader Chuck Schumer, a Democrat, has refused to use that approach, and Biden on Monday called on Republicans not to block the action with filibuster.
“Just get out of the way,” Biden told Republicans. “If you don’t want to help save the country, step aside so you don’t destroy it.”
But Sen. Joe Manchin, a moderate Democrat who has disagreed with many in his party on other important issues, said Democratic leaders should not rule out using budget reconciliation to raise the debt ceiling.
“Well, they shouldn’t rule anything out, we just can’t let the debt limit expire,” Manchin said, according to CNN reporter Manu Raju, who tweeted the senator’s comments.
When asked about Democratic leaders ruling out using reconciliation to raise the debt ceiling, Manchin said, “Well, they shouldn’t rule anything out, we just can’t let the debt ceiling expire.”
– Manu Raju (@mkraju) October 4, 2021 ‘Preventable crisis,’ says McConnell
McConnell, who called the default a “preventable crisis,” stood firm. “Democrats must address the debt limit,” he said in the Senate.
In an open letter to Biden, McConnell reiterated that Democrats do not need Republican cooperation to pass a bill that raises the debt ceiling. Democrats have known the Republican position for three months, McConnell wrote.
At the end of last month, the US House of Representatives approved and sent to the Senate a bill to suspend the limit on Treasury loans until the end of 2022.
Schumer filed a closing motion on Monday, ending debate, on a measure that would allow the debt limit to be extended. The Senate is likely to vote on it later this week, the third time Schumer has brought the issue to a vote.
Treasury Secretary Janet Yellen warned lawmakers last week that the U.S. government would exhaust its federal borrowing capabilities around Oct. 18.
>> ‘Crazy’ or serious? Trillion dollar coin seen as solution to US debt stagnation.
Failure to act could have catastrophic financial consequences. Last month, Moody’s warned that default could cause a nearly 4% decline in economic activity, the loss of nearly 6 million jobs, an unemployment rate close to 9%, a stock sell-off that could end with $ 15 trillion in household wealth and rising interest rates on mortgages, consumer loans, and business debt.
Concerns about the debt ceiling contributed to the stock market crash on Monday. The major Wall Street indices fell.
Democrats voted to raise the debt cap during the administration of Republican President Donald Trump even though they opposed deep tax cuts that increased debt.
Biden said the United States racked up nearly $ 8 trillion in new debt during Trump’s four years in office, more than a quarter of all outstanding debt.
“Republicans in Congress increased the debt threefold” under Trump, he said, with the support of Democrats.
Schumer said the Senate will have to stay in session for the weekend and possibly a planned recess next week if no progress is made on raising the debt limit.