Biden’s disturbing warning

The president of the United States, Joe biden, warned on Monday against the risk that his country suspend payments on your sovereign debt for the first time in its history, a “catastrophic” prospect which can only be avoided if the Senate acts.

In a speech to the White House, Biden called on the Republican opposition to help him suspend or raise the debt ceiling this week, in order to prevent the United States from reaching that debt limit on October 18.

“A meteor is approaching and will crash into our economy“, warned the president in reference to the serious consequences that a possible suspension of payments would have.

On the edge of the precipice

The government of the United States can only issue debt up to the limit set by Congress, which has the power to raise that limit as it sees fit; but the Republican opposition, which controls half of the seats in the Senate, is reluctant to do so.

Biden admitted that without the cooperation of the Conservatives, he could not guarantee that the United States would not hit its debt ceiling this month., a milestone technically reached at the end of July but that the Treasury department managed to manage temporarily to avoid a suspension of payments.

The Secretary of the Treasury, Janet YellenHowever, he warned that the “extraordinary” measures the government has taken to postpone the suspension of payments cannot be extended beyond October 18, and that Congress must take action before that date.

“Default on our debt obligations it would be a self-inflicted injury that would drag our economy off the top of a cliffJoe Biden insisted.

If that happened, “the dollar’s status as the reserve currency on which the world depends” would be threatened, and America’s credit score would likely be lowered, in addition to raising “mortgage and loan interest rates. auto or credit cards, “he explained.

Defiantly, Biden broke the republicans: “If you don’t want to help us save the country, step aside, don’t destroy it.”

In the hands of the Senate

The Democratic-majority House of Representatives already approved a bill last week to suspend the debt ceiling; But in the Senate, Democrats would need the support of at least 10 Republicans to make this move succeed.

Senate Republican Minority Leader Mitch McConnell has refused to convince his colleagues to vote for the measure, in the interests of fiscal discipline.

What McConnell has proposed is that Democrats attempt to raise the debt ceiling with Democratic votes alone, through a legislative mechanism called “reconciliation,” which allows for exceptional approval of projects by simple majority.

“Since your party wants to govern alone, you also have to deal with the debt limit issue on your own.“McConnell said in a letter sent to Biden on Monday.

However, according to Biden, even if Democrats go down this route, Republicans could try to “block” that vote with a maneuver known as filibuster.

“They are threatening (the Republicans) to use their power to prevent us from doing our job, which is to save the economy from a catastrophic event. I think that is frankly hypocritical, dangerous and unfortunate,” said President.

The debt of the Trump era

Biden accused the opposition of “play russian roulette with the american economy“and complained that most of the debt Republicans are reluctant to pay was generated during the four-year tenure of former Conservative President Donald Trump (2017-2021).

“They do not want to increase (the debt ceiling) when they are responsible for over $ 8,000 million in bills accumulated under the previous AdministrationBiden insisted.

The White House has not ruled out following McConnell’s proposed route of passing the measure with Democratic votes only, but Biden warned that the mechanism could result in the scheduling of “hundreds of votes” in the Senate that may “not have.” nothing to do with it “. . debt limit “.

This process could take around two weeks to resolve, according to experts in Senate functioning, which is just the deadline until Oct. 18, the deadline set by Yellen..

Democrats fear that if the Senate does not move this week towards a suspension of the debt ceiling, financial markets will suffer and it will reach a situation similar to that of 2011, when the United States was on the verge. incurring the suspension of payments and Standard & Poor’s lowered the country’s credit score.

Meanwhile, Biden continues to negotiate with his own party to try to get his infrastructure and social spending plans approved in the Senate, and this Tuesday he will travel to Michigan to promote those reforms.

The president had scheduled a virtual meeting on Monday with members of Congress from the progressive wing of the Democratic Party and another later this week with moderate lawmakers, but this issue is expected to remain in the background until the drama of the debt ceiling be resolved.