Sunday, June 4, 2023

US default could trigger recession, warn Harris and Brainard

WASHINGTON (Reuters) – Vice President Kamala Harris and White House chief economic adviser Lael Brainard said on Thursday a $31.4 trillion US debt default would plunge the economy into recession.

In a conference call with Democratic activists, Harris and Brainard urged them to reach out to lawmakers to voice their opposition to the loan default that is due in less than two weeks.

Harris used the call to focus on the impending default as President Joe Biden is attending a summit of world leaders from the Group of Seven in Japan in the next few days.

“A loan default could trigger a recession,” he said.

White House negotiators and congressional Republicans have met again on Capitol Hill to discuss finding common ground on lifting the $31.4 trillion debt limit and plan to meet again on Friday, a White House official said.

US Senate Majority Leader Chuck Schumer said lawmakers in his chamber should be prepared to return to Washington 24 hours before their recess next week if they need to vote.

The Democratic senator said he was “pleased that the other side has recognized that the best way forward is bipartisan legislation that can garner enough votes to pass in both the House (of Representatives) and the Senate.”

Brainard, director of the White House’s National Economic Council, said Biden’s negotiating team has been instructed not to accept any Republican proposal to raise the debt ceiling that would take health care away from Americans or deprive some of them. Will push you towards poverty.

Republicans, threatening to bankrupt the government, are trying to persuade Democrats to agree to tougher job requirements for some federal aid programs as well as spending cuts in exchange for lifting the debt ceiling .

Brainard said the administration’s goal, in discussions with House Speaker Kevin McCarthy’s team, is to work toward a fair, bipartisan budget deal.

“The government’s negotiating team is fighting overwhelming efforts to reverse the gains we’ve made: creating clean energy jobs, fighting climate change, and cutting costs for middle-class families, including students and insulin and other drugs are,” he said.

The US Treasury Department reiterated on Monday that it expects to be able to pay government bills only through June 1 without mounting pressure on Republicans and the White House to reach a deal in the coming days.

The limit should be raised from time to time as the government spends more than it takes in taxes.

Nation World News Desk
Nation World News Desk
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