March 29, 2023
Economy International

White House Insists on No Negotiations: Debt Ceiling Crisis Looms as US Faces Default

White House Insists on No Negotiations: Debt Ceiling Crisis Looms as US Faces Default

The White House has insisted that the looming debt ceiling crisis be dealt with without conditions and there is no room for negotiations on this. White House Press Secretary Karine Jean-Pierre told reporters that “This should not be political brinkmanship. We should be dealing with the debt ceiling without conditions. It is important. We’re not going to work our way around this; we’re not going to negotiate on this. This is the basic duty of Congress.”

Treasury Secretary Janet Yellen in a letter to Congress had raised the red flag on an imminent debt crisis. Given the sharp differences between the ruling Democrats and the opposition Republicans, who enjoy a majority in the House of Representatives, not handling the issue on time might result in the United States defaulting on its debt commitment, which has never happened in the past.

Republicans have so far insisted on not raising the debt limit which currently is USD 31.381 trillion as approved by Congress last month. This debt limit is the total amount of money that the US government is authorized to borrow to meet its existing legal obligations and is scheduled to reach its statutory limit on January 19.

Indian American Congressman Raja Krishnamoorthi, who is a Democrat, has called for an increase in the debt limit. He said, “If we don’t raise the debt ceiling, we’ll go into default, and only one default is enough to nuke the economy.”

Opposing an increase in the debt limit, Republican Congressman Ralph Norman said that USD 31.4 trillion is a massive amount of debt. He said, “The government owes this money because politicians in Washington simply will not stop spending. This has been the case for decades, and Republicans are just as much to blame as Democrats.”

Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries in a joint statement said that the Congress must act on legislation to prevent a disastrous default, meet America’s your obligations and protect its full faith and credit. They added that “A default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America’s working families on everything from mortgages and car loans to credit card interest rates.”

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