The US could default on its $31.4 trillion debt as early as June 1, forecasters predict
US President Joe Biden speaks during a news conference following the Group of Seven (G-7) leaders summit on May 21, 2023 in Hiroshima, Japan © Getty Images / Kiyoshi Ota-Pool/Getty Images
The White House has hit out at a Republican congressional leadership it says has become increasingly beholden to fringe ‘MAGA’ elements for obstructing talks designed to raise the US debt ceiling and avoid putting the country into default for the first time in its history.
In a statement posted to the White House website on Saturday, a spokesperson for the administration of President Joe Biden described a deal offered by House Speaker Kevin McCarthy on Friday as a “big step back” and said that it contained a set of “extreme partisan demands.”
“The President has over and over again put deficit reduction proposals on the table, from limits on spending to cuts to Big Pharma profits to closing loopholes for oil and gas,” the statement from White House Press Secretary Karine Jean-Pierre said. “It is only a Republican leadership beholden to its MAGA wing – not the President or Democratic leadership – who are threatening to put our nation into default.”
The proposal offered by McCarthy on Friday included significant cuts to domestic programs while increasing defense spending. It also imposed work requirements on some aid programs, while making it more difficult for states to waive work requirements for people in areas of high unemployment who rely on federal food assistance.
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The GOP deal also refuses Democratic requests to increase tax revenue to help pay for future budget deficits.
“I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk for nearly one million people,” Biden said on Sunday in comments delivered from Hiroshima, Japan, where he was attending the G7 summit.
Biden also accused Republicans of engaging in political theater in their handling of the negotiations to extend the debt ceiling. “I think there are some MAGA Republicans in the House who know the damage this would do to the economy, and because I am president, and the president’s responsible for everything, Biden would take the blame,” he said.
Unless an accord is struck, the Treasury Department has indicated that the US could default on its $31.4 trillion debt as early as June 1. This would lead to a scenario where Washington is unable to borrow more money or pay all of its bills.
