Biden Warns GOP That Defaulting on US Debt Will End String of Good Jobs Reports
© AFP 2023 / SAUL LOEB
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Congressional lawmakers have remained at a debt ceiling stalemate for months as Republican lawmakers have used the matter as a negotiating tactic, and refused to heed the US president's veto warning. The Treasury Department has warned the US may default on its debts by early June.
US President Joe Biden warned on Friday that a default on US debt would effectively end the string of positive job reports that continued into the month of April.
“Just today they’re reporting 250,000 new jobs,” Biden said. “The last thing this country needs after all we’ve been through is a manufactured crisis and that’s what this is: A manufactured crisis. That’s what it is from beginning to end, it’s a manufactured crisis driven by MAGA Republicans in the Congress.”
The latest job report released on Friday showed the United States added 253,000 nonfarm jobs in April, easily beating Wall Street’s prediction of 180,000. Unemployment also sits at 3.4%, tied for the lowest it has been since 1969, though how unemployment figures are tracked was changed in 1994.
The US government presently remains at risk of defaulting on its debts if congressional fail to act on the debt ceiling and raise its limits. US Treasury Secretary Janet Yellen has warned the government may default sometime during the summer, recently pointing out to lawmakers it could happen as soon as June 1.
The government already hit its self-imposed debt ceiling in January and has been operating under "extraordinary measures" that the US Treasury Department undertook as a temporarily fix.
Citing a recent Moody's report, Biden warned that if Republicans continue to hold up the debt ceiling limit, it would also put some 780,000 people at risk of losing their jobs in the event of a default.
Additionally, the perception of the United States could take a big hit overseas as the nation would be seen as a government that cannot keep its obligations. Biden underscored that “[we] are not a deadbeat nation."
“Let’s get it straight: They’re trying to hold the debt hostage for us to agree to some draconian cuts, magnificently difficult and damaging cuts. But unfortunately, they’re threatening to undo all this progress by letting us default," he said.
Last month, the GOP-controlled House passed a bill that would raise the debt ceiling but only with the condition that spending be cut as well. Raising the debt ceiling would not increase spending but would fund spending that has already been approved by Congress.
Senate Majority Leader Chuck Schumer (D-NY) has stated the Senate will not consider the bill, with Senate Democrats instead opting to hold a series of hearings to warn the public about “the true impact of this reckless legislation on everyday Americans.”
Biden has also threatened to veto the bill if it reaches his desk.
“As I’ve said all along, we can debate where to cut, how much to spend and how to finally move the tax system where everybody can pay their fair share,” Biden said. “But not under the threat of default.”
Congress lifted the debt ceiling three times under former President Donald Trump without preconditions. The GOP bill would have reduced spending back to 2022 levels.
Biden plans to meet with four congressional leaders next week. He last met with House Speaker Kevin McCarthy (R-CA) in February to discuss the debt ceiling issue.
