A.In the face of an impending payment default by the United States due to a blockade by the Republicans in Congress, President Joe Biden has accused his opponents of playing “Russian roulette” with the American economy for political reasons. If the debt ceiling is not raised anytime soon, the US economy is threatened with a crash that endangers jobs, savings and pensions, Biden said in the White House on Monday. If Republicans are unwilling to take responsibility, they should “get out of the way” and not use procedural tricks in the Senate to block the Democrats from raising the cap.
The Treasury Department has warned the US could run out of money by October 18 if the debt ceiling is not raised or suspended by Congress. A default would damage confidence in the creditworthiness of the world’s largest economy, which could trigger a financial crisis and economic turmoil.
The consequences could be “disastrous”
Biden warned a default could result in a downgrade in the country’s credit rating. This would jeopardize the status of the US dollar as a reserve currency and lead to higher interest rates for US consumers, he warned. Addressing the Republicans, the Democrat declared: “You have to stop playing Russian roulette with the US economy.”
The Democratic majority leader in the Senate, Chuck Schumer, called on Monday that a law to increase the limit must be passed this week. The consequences of even approaching the cliff could be “disastrous”. Meanwhile, Republican minority leader Mitch McConnell blamed the Democrats. They could decide to raise the upper limit themselves with a narrow majority and thus avoid the country “sleepwalking into an avoidable catastrophe”.
The last applicable debt limit expired in July. Since then, the Ministry of Finance has taken “extraordinary measures” to prevent a payment default. So far, Republicans and Democrats have still agreed to raise the limit – albeit often after trembling and several rounds of negotiations.