“America is not a delinquent nation, we have never ever defaulted on debt,” Biden said at a small business event at the White House.
The president warned that the threat of non-payment by some Republicans in Congress is “totally irresponsible” and that it is essential to take it “off the table.”
“It would lead to higher interest rates, higher credit card rates, higher mortgage rates,” Biden said.
“The most immediate thing we can do is guarantee the continued confidence of our economy and the financial system. The most important thing we have to do in that regard is make sure that the Speaker’s threat of a national debt default is ruled out. “, he added.
On Wednesday, the House of Representatives narrowly passed a bill to raise the current $31.4 trillion public debt ceiling, which includes sweeping spending cuts over the next decade.
Although the bill is not expected to pass the Senate, McCarthy hopes to lure Biden into spending cut talks as the White House and congressional Democrats insist on an unconditional debt limit hike.
The Treasury Department could run out of means to pay its bills in a matter of weeks if Congress doesn’t act and financial markets are already sending out warning signs.
A standoff in 2011 led to a downgrade of the country’s credit rating, raising borrowing costs and hurting investment.
During a visit to Jerusalem, McCarthy said he worries about the debt ceiling, but the only way to solve the problem is for Biden to negotiate. “We’re going to have to come together to figure it out. I’m looking forward to the president changing his mind and negotiating with us,” he said.