![]() What's more, a default would shake the U.S. The Brookings Institution noted a default could lead to $750 billion in higher federal borrowing costs over the next decade - a twist given that Republican concerns about spending and debt have helped to fuel the borrowing-limit stalemate. bond ratings would be classified as "restricted default," according to Fitch Ratings, and Treasurys would have a D rating until the U.S. Even a brief default would lead to the loss of 2 million jobs, according to the data. were to default, gross domestic product would drop 4% and 6 million workers would lose their jobs, Moody's projected. economy into a tailspin as bad as the Great Recession. A Moody's report last year said a default on Treasury bonds could throw the U.S. The Treasury Department has started to take extraordinary steps to keep paying the government's bills, and expects to be able to avoid a first-ever default at least until early June. Treasury Secretary Janet Yellen warned Monday that failure to hike the debt ceiling would cause an "economic catastrophe."ĭefaulting on sovereign debt would wreak havoc on the economy and roil markets around the world. Whether you pay the debt or not, doesn't have a damn thing to do with what your budget is," Biden said Friday. The Biden administration has said the GOP has a constitutional responsibility to raise the borrowing limit. The White House has stressed that while it is open to discuss spending cuts, it will not negotiate with Republicans on the debt ceiling. But House Republicans have said they will not lift the limit if Biden and lawmakers do not agree to future spending cuts. Doing so does not authorize new spending. Lifting the debt ceiling is necessary for the government to cover spending commitments already approved by Congress and the president and prevent default. That is reckless, irresponsible and extreme." "There's one group in Washington, D.C., extreme MAGA Republicans, who have indicated they are willing to take us down a path of default. "House Democrats have taken default off the table Senate Democrats have taken default off the table Senate Republicans, as just indicated by Leader McConnell, have taken default off the table President Biden from the very beginning took default off the table," Jeffries said. Jeffries, speaking to reporters after the meeting, framed House Republicans as the only group that would not rule out the prospect of a first-ever default on U.S. and the sooner the president and the speaker can reach an agreement the sooner we can solve the problem." "The United States has never defaulted on its debt and it never will," said McConnell. McConnell joined McCarthy outside the White House, where he reiterated that Congress would not allow the country to default on its debt. "We can try to come together on those in a budget and appropriations process but to use the risk of default, with all the dangers that has to the American people, as a hostage and say it's my way or no way, or mostly my way or no way, is dangerous." If you look at what President Biden had proposed and you look at what Speaker McCarthy has proposed, they're very, very different," Schumer said. "There are large differences between the parties. Schumer called on McCarthy to negotiate proposed spending cuts through the usual budgetary process without threatening default. Occasionally there would be a little bit of an assertion that maybe was a little over the top from the speaker," Biden said. "The tenor of the meeting was with three of the four participants very measured and low key. "I think he knows that default would be disastrous and I think he knows what he's passed could not possibly pass anywhere in the Congress - it's dead on arrival."Īsked about the mood in the room, Biden said three of the four leaders were sensible throughout the discussions. "I think he knows better," the president said. And that is a shame, because it makes things more complicated."īiden said "I don't know" what McCarthy thinks. "Instead of him giving us a plan to remove default he gave us a plan to take default hostage. "We explicitly asked Speaker McCarthy, 'Would he take default off the table?' He refused," said Schumer. Personal Loans for 670 Credit Score or LowerĮvery leader present except for McCarthy agreed to remove the threat of default when asked by Biden, according to Democratic leaders at the meeting. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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