Joe Biden accuses Republicans of wanting to create a US sovereign debt crisis

The President of the United States, Joseph Biden, a member of the Democratic Party, vehemently criticized some Republican politicians on Friday, accusing them of wanting to generate a crisis by delaying the decision to increase the sovereign debt threshold.

“The last thing the country needs is a manufactured crisis,” said the US president, quoted by Reuters. The leader of the White House is dissatisfied with the fact that the Republicans condition the acceptance of the supplement of the sovereign debt threshold on budget cuts. “The two issues have nothing to do with each other. Whether or not you pay your debt has nothing to do with the size of the budget,” said Biden, who is demanding massive funding for a series of social and environmental programs.

“Next week, I intend to reiterate to the leaders of Congress that they must do what every other Congress has done, which is to pass the increase in the debt ceiling, let’s avoid going into default,” Biden stressed, warning that any delay could have impact on jobs and economic progress. “The Republicans are threatening to cancel all the progress, by leaving the country insolvent”, the leader from the White House emphasized.

The US Secretary of the Treasury, Janet Yellen, has repeatedly warned that the United States risks defaulting if Congress does not approve raising the sovereign debt ceiling. Default “could happen on June 1”, warned Janet Yellen recently.

In the context of the crisis, President Biden called Kevin McCarthy, the Speaker of the House of Representatives, on Monday while he was visiting Israel. Biden invited McCarty, one of the leaders of the Republican Party, to come to a meeting called at the White House on May 9. Hakeem Jeffries, the leader of the Democratic group in the House of Representatives, as well as Chuck Schumer, the leader of the Democratic group in the Senate, and Mitch McConnell, the leader of the Republican group in the Senate, were invited to the meeting.

President Biden “will emphasize that actions to avoid insolvency must be adopted immediately by Congress, without conditions”, said a White House official, under the protection of anonymity. The US president does not agree to any condition formulated by the Republican leaders in Congress. It will accept possible reductions in federal budget expenditures only after avoiding the current crisis situation.

Kevin McCarthy, the president of the United States House of Representatives, proposed, in mid-April, an addition of 1,500 billion dollars to the sovereign debt threshold, but conditioned the plan to reduce budget expenditures, according to the website Axios.com.

Kevin McCarthy announced that he will continue negotiations with the Biden Administration on the basis of a plan to increase the sovereign debt threshold by 1,500 billion dollars, but he asked for the limitation of discretionary budget spending at the level of the fiscal year 2022, the capping at 1% of the increase in the budget deficit, the reactivation of unspent funds during the pandemic and the rejection of the law on funding intended for the Internal Revenue Service (IRS).

Also, McCarthy would like to suspend the facilities approved by President Biden regarding credits for public higher education and cancel the tax credits granted by the Inflation Reduction Act.

The United States has reached the sovereign debt ceiling set at $31.4 trillion since January, but the Treasury Department has continued to make payments through exceptional actions to manage existing resources and spending.