Undersecretary of the Treasury, Wali Adimo, noted that Congressional intervention was necessary to avoid a “catastrophic” economic situation.
May 14, 2023 – 14:31
Joe Biden’s government warned again Sunday of “catastrophic” consequences, including huge job losses, if the state defaults on debt obligations, before resuming negotiations with Republicans next week on a deal.
“If Congress fails to raise the debt limit at the time of default, we will be in a recession and that will be catastrophic,” Assistant Secretary of the Treasury Wally Adeyou said on CNN’s “State of the Union” Sunday.
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For weeks, lawmakers, policymakers, bankers and the White House have been warning that the United States is on the brink of default, a move that could plunge the world’s largest economy into uncertainty with disastrous consequences, including an imminent recession and international financial contagion. .
The Congressional Budget Office on Friday projected that the country could default on its debt by June 15 if lawmakers fail to reach an agreement with Biden to increase existing curbs on public spending.
“We shouldn’t be at this point,” Adeyou said, reiterating the administration’s call for lawmakers to end partisan bickering and raise the US debt ceiling.
“The United States has never defaulted on its debt, and we cannot,” he stressed.
Biden has declared he wants a “clean” increase in the debt ceiling, but Republicans insist that any extension of the country’s borrowing capacity, which currently stands at $31.4 trillion, must be accompanied by significant spending limits.
A long-awaited new round of talks on the matter between Biden and Republican leaders, including House Speaker Kevin McCarthy, has been postponed until next week.
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Adeyou acknowledged that the negotiations were “constructive” and progressing on a personal level, but rejected Republican claims that Biden did not want to control federal spending.
“The president presented a plan that includes $3 trillion in debt relief over 10 years,” Adeyou said, referring to Biden’s March budget request.
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