US government warns default could cause recession

In a message to Democratic activists, Harris and Brainard urged them to persuade lawmakers to prevent the US from defaulting on its debt in less than two weeks.

US Vice President Kamala Harris. Photo: Reuters

Ms Harris is working to prevent this from happening as President Joe Biden spends the coming days in Japan for the G7 summit of world leaders. “A default on debt could trigger an economic recession,” she said.

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

US Senate Majority Leader Chuck Schumer said lawmakers from his chamber should be ready to be in Washington in case they need to vote, even on weekends.

Brainard, director of the White House National Economic Council, said Mr. Biden’s negotiating team has been instructed not to agree to any Republican proposal to lift the debt ceiling if it takes away Americans’ health care or pushes any of them into poverty.

Republicans, who are threatening to force the U.S. government into default, are trying to persuade Democrats to accept demands to curb some federal aid programs, as well as cut spending, in exchange for lifting the borrowing ceiling.

Brainard said the goal of the Biden administration, in talks with House Speaker Kevin McCarthy's team, is to work toward a reasonable bipartisan budget deal.

“The administration’s negotiating team is fighting back against radical efforts to reverse the progress we have made: creating clean energy jobs, fighting climate change, and lowering costs for middle-class families, including for students, insulin, and other medications,” she said.

The US Treasury Department reiterated on Monday that it expects to be able to pay the US government's bills only through June 1 if the debt limit is not raised, putting pressure on Republicans and the White House to reach a deal in the coming days.

This limit needs to be lifted regularly because the US government tends to spend more than it receives in taxes.

Huy Hoang (according to Reuters, CNN)

Source: https://www.congluan.vn/chinh-phu-my-canh-bao-vo-no-co-the-gay-ra-suy-thoai-kinh-te-post248267.html