The White House on Wednesday said that President Joe Biden will not negotiate with Republican hardline conservatives over their “risky and dangerous" opposition to expanding the US debt limit.
“There will not be any negotiations over the debt ceiling. We will not do that. It is their constitutional duty," Press Secretary Karine Jean-Pierre told reporters. “It should not be used as a political football."
The world’s biggest economy is on the brink of severe disruption with Republicans threatening to refuse the usual annual rubber stamping of an increase in the legal borrowing limit, potentially pushing the United States into default.
Treasury Secretary Janet Yellen says that the government will effectively hit its $31.4 trillion borrowing limit on Thursday, at which point she will use accounting manoeuvres to stave off default temporarily.
Even with those measures, the government will again find itself at the edge of a fiscal cliff in a few months, likely around June, experts say.
A default would likely trigger panic on the financial markets with contagion far through the global economy, just as the United States is attempting to ease through a difficult post-Covid economic period without falling into recession.
Far-right Republicans who now hold key power in the party’s narrow majority in the House are demanding that Biden agree to slash government spending. They argue that radical cuts are needed to reduce borrowing, which for years Congress has agreed to increase each year — raising the so-called debt ceiling.
The White House says that cuts of the size demanded by Republicans would have to come out of untouchable social security and military spending programs, or involve major new taxes. Democrats also argue that the current debt is to pay for a budget already agreed to by Congress and therefore not up for renegotiation.
“Think about how Congress has… dealt with the debt ceiling for the past several decades. It is their responsibility, their constitutional responsibility to act," Jean-Pierre said.
“There is a reason that treasury secretaries of both parties, if you think about it, if you all remember, rejected this incredible, risky and dangerous idea that has never been tried before," she said of the Republican threat.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)