The Biden administration stepped up its push to get Congress to raise the debt limit on Wednesday, as the Pentagon warned that default could trigger a national security crisis and the president said it risked tanking the market and wiping out retirement savings.
‘It’s about paying for what we owe, and preventing catastrophic events,’ President Joe Biden told some of the nation’s top chief executives, likening the impact to a ‘meteor heading our way.’
He spoke soon after Secretary of Defense Lloyd Austin issued his own warning.
‘If the United States defaults, it would undermine the economic strength on which our national security rests,’ he said.
‘It would also seriously harm our service members and their families because, as Secretary, I would have no authority or ability to ensure that our service members, civilians, or contractors would be paid in full or on time.
The moves come as the White tries to pressure Senate Minority Leader Mitch McConnell to cave in the current debt ceiling stand-off.
Treasury Secretary Janet Yellen has repeatedly warned that the U.S. faces recession if it does not find a solution by Oct. 18.
But Republicans say Democrats must go it alone if they want to increase the $28.4 trillion ceiling and fund Biden’s huge spending plans.
That brought an accusation from Biden that his opponents were playing Russian roulette with the economy as he tried to spell out the real world effects of a default.
‘Defaulting on the debt, which Secretary Yellen said could happen on any day after October the 18th, means that social security benefits will stop,’ he said.
‘Salaries to service members will stop. Benefits to veterans will stop, and much more.
‘A failure to raise the debt limit will undermine the safety of the United States’ Treasury securities, threaten reserve status of the dollar as a world currency that the world relies on, downgrade America’s credit status and result in a rise in interest rates for families talking about mortgages, auto loans, credit cards.’
President Joe Biden wil meet with bank executives on Wednesday to pressure Senate Minority Leader Mitch McConnell to cave in the current debt ceiling stand-off. On Tuesday night he said it was a ‘real possibility’ that Democrats scrapped the filibuster on debt ceiling bills
• Jane Fraser, CEO, Citi
• Greg Hayes, CEO, Raytheon
• Charlie Oppler, President, National Association of REALTORS
• Jo Ann Jenkins, CEO, AARP
• Adena Friedman, President and CEO, Nasdaq
• Punit Renjen, Global CEO, Deloitte LLP
• Jamie Dimon, CEO, JPMorgan Chase
• Pat Gelsinger, CEO, Intel
• Brian Moynihan, CEO, Bank of America
Biden met with bank leaders including JPMorgan Chase’s Jamie Dimon, Citi’s Jane Fraser and Bank of America’s Brian Moynihan along with Yellen, adviser Cedric Richmond and Commerce Secretary Gina Raimondo.
Biden and Senate Democrats are trying to get around a Republican filibuster threat and pass the same bill that got through the House last week, which suspends the debt ceiling until December 2022, after the midterm elections.
They have until October 18 to pass something, before the U.S. falls off a financial cliff.
Ahead of the meeting, the White House warned that failure to increase the ceiling could trigger an international financial crisis.
‘A default would send shock waves through global financial markets and would likely cause credit markets worldwide to freeze up and stock markets to plunge,’ the White House Council of Economic Advisers said in a new report.
‘Employers around the world would likely have to begin laying off workers.’
The president is also hosting Raytheon CEO Greg Hayes, the president of the National Association of REALTORS Charlie Oppler, AARP’s CEO Jo Ann Jenkins, the President and CEO of Nasdaq Adena Friedman, Deloitte’s global CEO Punit Renjen and Intel’s CEO Pat Gelsinger, the White House told DailyMail.com.
Jenkins will likely warn about the cost to seniors if Americans begin missing Social Security payments.
The meeting will be held both in-person and virtually, the White House said.
‘These executives represent some of America’s best-known companies and industries, and they understand firsthand that a default would be economically devastating – risking millions of jobs and throwing our country into recession, and causing lasting harm to America’s economic strength by threatening the dollar’s status as the currency the world relies on and downgrading the U.S.’s credit rating,’ a White House official said, previewing the meeting.
Until now, Biden hasn’t tried to use big business to go up against Republicans.
All week, McConnell has remained resistant, saying Democrats need to pass a debt bill using only Democratic votes, using the more complex process of reconciliation.
Biden and Democrats have shot back that the reconciliation process takes too long and is also too risky.
Instead of going that route, Senate Democrats are now thinking about nuking the filibuster for bills dealing with the debt ceiling.
‘Oh I think that’s a real possibility,’ Biden told reporters about the plan as he returned from his trip to Michigan Tuesday evening.
Biden said earlier Tuesday, as he departed Lansing, Michigan, that he planned to talk to McConnell – though he didn’t say when.
JPMorgan Chase CEO Jamie Dimon (left) and Bank of America CEO Brian Moynihan (right) are among the business leaders meeting Wednesday with Biden
Republican swing votes, Sens. Mitt Romney and Susan Collins, have already said they won’t cross the aisle to assist Democrats.
Deputy press secretary Karine Jean-Pierre said on Air Force One Tuesday that the White House didn’t have a specific date or deadline figured out for when they’d push Democrats to switch gears and pursue a reconciliation bill in order to avoid an economic catastrophe.
‘I don’t have a date for you at this time,’ she told DailyMail.com.
‘We’re just going to continue to be very, very clear,’ she said. ‘Like the president said yesterday, you know, we have to take a step back and look at how this has been done 80 times, that it’s been a bipartisan fashion … three times during the Trump administration.’
‘And we can’t play political football right now. We can’t play politics. We have to get this done for the American people, and that is the most important thing,’ Jean-Pierre added.
McConnell and Republicans are unlikely to be convinced by the CEOs as there’s still a rift between the party and some of the companies.
Intel was among the businesses that said it wouldn’t give money to any Republican who voted against the certification of the 2020 election.
Nasdaq’s PAC paused donations to Republicans for several months.
And Citi and JPMorgan Chase paused all political contributions after the January 6 Capitol attack.