US president Joe Biden is seeking corporate America’s help in his bid to convince Congress to raise the US borrowing limit, as Republicans in the Senate signalled they would block the measure in a new vote on Wednesday.
Biden will at 1 pm host a group of chief executives and business leaders including Jamie Dimon of JPMorgan, Jane Fraser of Citi and Brian Moynihan of Bank of America, as well as Greg Hayes from Raytheon and Pat Gelsinger of Intel at the White House on Wednesday.
“These executives represent some of America’s best-known companies and industries, and they understand first-hand that a default would be economically devastating,” the White House said.
Failure to do so would be “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 US credit rating”.
Janet Yellen, the US Treasury secretary, is also expected to attend the meeting. She has warned that the US risks running out of cash to pay its bills after October 18 without an increase.
The meeting comes as the Senate is set to hold a crucial procedural vote on a measure that would raise the debt ceiling and avert a default crisis in just over a week. The vote, which is scheduled for Wednesday afternoon, is widely expected to fail, the latest in a series of confrontations on Capitol Hill that have pitted Democrats against Republicans.
Biden is trying to portray Republican opponents of the debt ceiling increase as playing “Russian roulette” with the economy and financial markets, raising tensions between Republican lawmakers and their allies and donors in the business community.
Republican lawmakers have insisted they will not sign on to raising the debt limit, seeking to tie the effort to Democrats’ ambitious spending plans, including the president’s proposals for a $1.2tn infrastructure bill and a $3.5tn social spending package.
Democrats contend that Republicans are being hypocritical, given they voted to lift or suspend the debt ceiling three times when Donald Trump was president, and most of the government’s current borrowing is needed in order to pay for costs incurred during the previous administration.
Chuck Schumer, the Senate’s top Democrat, has asked Republicans to agree to suspend the filibuster — which in effect requires at least 60 senators to sign on to most legislation, meaning at least 10 Republicans would have to join all 50 Democrats. If so, his party can lift the debt ceiling on their own, using a simple majority.
But Mitch McConnell, the Republican Senate minority leader, has so far refused, insisting that Democrats use a more complicated manoeuvre called reconciliation to pass the measure without Republican support. Schumer and the White House, however, both argue that reconciliation would be too risky and time-consuming to avert a crisis by the middle of the month.
Some Democrats have floated the idea of temporarily and unilaterally suspending the filibuster in order to raise the debt ceiling. When asked about the idea on Tuesday night, Biden told reporters it was “a real possibility.”
The White House’s Council of Economic Advisers warned on Wednesday that without action, it could take “decades” for the US to recover. Essential payments owed to Americans would be “endangered”, the public health system would be “unable to adequately function” and maintaining national defence could also be impaired, top members said in a report.
“Financial markets would lose faith in the United States, the dollar would weaken, and stocks would fall,” they added. The country’s credit rating would also be likely to take another hit, and as borrowing costs spike, a painful economic recession and “credit market freeze” would imperil companies nationwide, they cautioned.
“The debt ceiling is not and should not be used as a political football. The consequences are too great.”
