President BidenJoe BidenAfghanistan’s ambassador on whether Afghans will trust a U.S. president again: ‘Not soon’ Biden heading to Michigan to promote agenda amid Democratic infighting Manchin clashes with fellow Democrats over fossil-fuel demands MORE warned Monday that the U.S. may default on its debt for the first time in history if Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellWhite House seeks to flip debate on agenda price tag Biden sees support from independents drop The Hill’s Morning Report – Presented by Alibaba – Democrats still at odds over Biden agenda MORE (R-Ky.) continues to block Democratic attempts to raise the federal borrowing limit.
Speaking to reporters following a Monday speech on the fiscal standoff, Biden said he cannot guarantee that the U.S. will be able to pay its bills past Oct. 18 if GOP senators are unwilling to clear a path to keep the country solvent.
“I cannot believe that will be the end result, because the consequences are so dire,” he said. “But can I guarantee it? If I could, I would. But I can’t.”
Biden’s warning followed a speech in which he excoriated Republicans for closing off every pathway Democrats have used to suspend the federal borrowing limit and accused the GOP of playing a “reckless, dangerous” political game with the U.S. economy.
Republicans last week blocked a House-passed bill that would raise the debt limit and also an attempt from Senate Majority Leader Charles SchumerChuck SchumerBattling over Biden’s agenda: A tale of two Democratic parties Arizona Democrats’ frustration with Sinema comes to a head Trump teases Schumer about occasional Ocasio-Cortez challenge MORE (D-N.Y.) to send a debt limit suspension bill to the House.
“Just get out of the way. You don’t want to help save the country, get out of the way so you don’t destroy it,” Biden said in his speech.
His remarks come 14 days before the U.S. is on track to default on the national debt with no clear path toward a deal to avert an unprecedented disaster.
Treasury Secretary Janet YellenJanet Louise YellenWhite House seeks to flip debate on agenda price tag Alabama clears plan to use COVID-19 relief funds to build prisons The Hill’s Morning Report – Presented by Alibaba – Democrats still at odds over Biden agenda MORE warned lawmakers last week that the department will exhaust the cash and accounting measures necessary to avoid a default by Oct. 18, the most specific date offered yet.
Raising or suspending the debt ceiling does not affect the size of the national debt or future spending. It simply allows the Treasury to issue new bonds generate cash pay off expenses approved over several decades by both parties
If Congress does not act to raise the debt ceiling after that point, the U.S. could miss debt payments for the first time in its history and unleash a potential economic and financial catastrophe.
The U.S. could suddenly be unable to fund basic federal entitlements and services — including Social Security checks and salaries for military and federal personnel — as the recovery from the coronavirus recession faces new threats. Interest rates within the U.S. would likely skyrocket and global financial markets could seize as trillions of dollars of Treasury bonds become irredeemable.
Even so, GOP senators have vowed to block any Democratic attempt to raise the debt ceiling unless it comes through the budget reconciliation process, the vehicle for Biden’s multitrillion-dollar social services and climate bill. Despite raising the debt ceiling three times under former President TrumpDonald TrumpAfghanistan’s ambassador on whether Afghans will trust a U.S. president again: ‘Not soon’ Trump says he would beat DeSantis in potential 2024 primary Saudi government confirms first round of talks with Iran MORE, Republicans insist Democrats must do it alone through the only process the GOP cannot interrupt.
In a Monday letter to Biden released shortly before the president’s remarks, McConnell reiterated the GOP’s months-long threat to block a debt ceiling increase.
“Your lieutenants in Congress must understand that you do not want your unified Democratic government to sleepwalk toward an avoidable catastrophe when they have had nearly three months’ notice to do their job,” McConnell wrote.
“Republicans’ position is simple. We have no list of demands. For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”
McConnell also cited Biden’s previous vote against raising the debt ceiling as a senator during the George W. Bush administration. While Senate Democrats did in fact vote against raising the debt ceiling under a Republican president, they did not filibuster debt ceiling increases as Republican senators have done under Biden.
Schumer and Speaker Nancy PelosiNancy PelosiBiden heading to Michigan to promote agenda amid Democratic infighting Schumer sets one-month goal for passing two spending bills Christie: 2020 Joe Biden ‘is now officially dead and buried’ MORE (Calif.) each ruled out using the reconciliation process to raise the debt limit last week. Both leaders insisted that the process is too complicated to address such an urgent issue, even though reconciliation rules specifically allow for raising the debt limit to a specific level.
Schumer also warned Democratic colleagues in a Monday letter that the Senate must send Biden a bill to raise the debt ceiling by the end of the week, arguing that getting too close to Oct. 18 is too dangerous.
While Biden did not close the door on raising the debt limit through reconciliation Monday, he also expressed concerns about opening what could be a procedural Pandora’s Box. Raising the debt limit through budget reconciliation could involve dozens of votes on amendments that could create myriad new problems, he argued.
“Everything else would come to a standstill, but you still find yourself in a situation where at the end of the day, you may have passed something that in fact then has to be undone again by either Democrats or Republicans,” Biden said.
“It’s an incredibly complicated, cumbersome process, and there’s a very simple process sitting at the desk in the United States Senate,” he continued, referring to a bill passed by the House last week that would suspend the debt ceiling through December 2022.
Updated at 12:43 p.m.