U.S. Vice President warns that a default could trigger recession
U.S. Vice President Kamala Harris warned Thursday that a default due to a failure to reach an agreement in Congress to raise the debt ceiling would could provoke “a recession”.
During a briefing call, Harris warned, “A default could trigger a recession, pause military pay And raise interest rates for years.”
The vice president’s remarks come shortly after House Speaker Kevin McCarthy, R-Kevin McCarthy, a Republican, showed optimistic about the possibility of reaching an agreement with the Democrats later this week.
“I see a path to agreement. I think we have a structure and I think we’re all working hard,” McCarthy told reporters on Capitol Hill. The conservative was confident that the negotiating team would be able to reach an agreement this weekwhich would be voted on in the Lower House next week, according to Politico.
In the same vein, Senate Democratic leader Chuck Schumer spoke from the floor, explaining that if the House votes on a deal to raise the debt ceiling next week, the upper chamber will do the same shortly thereafter, and called on senators to be prepared to return to Congress immediately.
Following Harris’s call, however, the Republican National Committee issued a statement criticizing “the lack of leadership.” of Joe Biden’s administration and, in particular, the vice president, whom they held responsible for “the worst border crisis in history.”
In her message, Harris criticized Republican lawmakers for giving rise to a “manufactured crisis” with their refusal to approve an increase or a suspension of the debt limitthe legal ceiling on the amount of money the U.S. can borrow, which was reached in January.
The vice president noted that Congress has agreed to raise or suspend the debt ceiling. more than 70 times since the 1960s., including three times during the administration of Republican Donald Trump (2017-2021).
He also recalled the devastating consequences for the U.S. economy of the 2011 scare, when the country almost fell into default of its public debt because Republicans refused to raise the debt limit until the Barack Obama administration passed limits on government spending.
This time around, conservatives, led by McCarthy, are also calling for cutting government spending to reduce the deficit.
“According to some estimates, we would have one million more jobs in our nation,” Harris said. The event also resulted in the downgrading of the country’s credit rating by Standard & Poors.
Biden is on a trip to Japan to participate in the G7 summit in Hiroshima, but decided to cut his trip short to try to build momentum for the negotiations. on the debt. Yesterday he expressed his conviction that there will be an agreement because everyone involved “understands the consequences.”
