A number of top business leaders joined President Joe Biden in calling on Congress to immediately raise or suspend the debt limit, a move Biden has repeatedly blamed Senate Minority Leader Mitch McConnell and Republicans for obstructing.
Those comments came during a Wednesday meeting at the White House attended by Biden, Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, and senior adviser Cedric Richmond. Private sector participants, according to a White House aide, included AARP CEO Jo Ann Jenkins, Citi CEO Jane Fraser, National Association of Realtors President Charlie Oppleer, NASDAQ President and CEO Adena Friedman, Deloitte Global CEO Punit Renjen, JPMorgan Chase CEO Jamie Dimon, Intel CEO Pat Gelsinger, and Bank of America CEO Brian Moynihan. Dimon, Friedman, and Moynihan both took part in the meeting virtually.
Biden has frequently turned to large companies to lobby support for his policies, including the administration's coronavirus pandemic response, but Wednesday marked the first time the president sought to specifically weaponize the private sector against what he called Republican "hypocrisy."
"I don't have insight on what the right legislative solution is, but I can tell you that from an economic perspective we need to resolve this issue very quickly. Every day of delay right now comes at an increasing price," Fraser told Biden. "We are, simply put, playing with fire right now, and our country has suffered so greatly over the last two years. The human and the economic cost of the pandemic has been wrenching, and we don't need a catastrophe of our own making to undermine the progress that is underway."
Friedman similarly confirmed that the markets are experiencing "elevated volatility" which she "partially attributed to the uncertainty that's been introduced by the delay in improving the debt limit."
Dimon, who had not yet publicly commented on the topic, called the debate a "morality point," suggesting a full elimination of the debt limit, a position supported by Yellen during congressional testimony.
"We all teach our children that we're supposed to meet our obligations," Dimon stated. "I don't think the nation is very different."
A number of outside groups not present at Biden's Wednesday meeting have previously echoed the president's calls to immediately address the debt limit.
Amazon CEO Andy Jassy in September called on Congress to take care of the debt limit "sooner than later."
"I think it’s scary for consumer confidence and for confidence in U.S. businesses and potential credit ratings if we don’t ... raise that debt ceiling," he told CNBC.
The Chamber of Progress tweeted in September that "the debt ceiling isn't a bargaining chip or a talking point. It's a basic responsibility that allows our country to pay the bills."
White House officials told the Washington Examiner that convincing private companies to side with Biden and Democrats would be the president's strongest weapon in potentially knocking Mitch McConnell off his current negotiating position on the subject.
One official told the Washington Examiner that addressing the debt should be a "shared responsibility." That person specifically pointed to a 2006 debt vote where Democrats allowed Republicans to bypass the filibuster and raise the limit with a simple majority vote.
The official added that McConnell's strategy will create a cyclical pattern where partisan bickering raises serious threats of a U.S. credit default every one to two years.
McConnell has maintained since April that if Democrats intend to enact another multitrillion-dollar budget reconciliation spending package, they must pass a debt limit suspension or hike through that same mechanism. McConnell and Republicans went so far as to block a unanimous consent request from Senate Majority Leader Chuck Schumer in late September that would have allowed Democrats to act on the debt limit with a separate majority vote.
"Republicans’ position is simple," McConnell wrote in a letter sent to Biden on Monday. "We have no list of demands. For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well."
Throughout Wednesday's event, Biden highlighted "the cost of any delay" in addressing the debt limit and hammered "Republican obstruction and political games" for "increasing the risk" of the U.S. defaulting on its credit for the first time in history. If that were to happen, White House officials say that would result in significant interest rate spikes for middle-class people looking to borrow money and as many as 110 million people losing Social Security and Medicare benefits.
"The Democrats are willing to step up and stop this economic catastrophe if Senate Republicans will just get out of the way," he told the room. "Our Republican friends are planning to block the vote to raise the debt limit by using a legislative procedural power called the filibuster."
For the second time this week, Biden specifically stated that "raising the debt limit is paying our old debts" and "has nothing to do with new spending or what may be coming."
"The reason we have to raise the debt limit is in part because of the policies of the previous administration, which incurred nearly $8 trillion in bills in four years, some of which Democrats voted for," the president continued.
Yellen previously stated that the "X Date," the point at which the U.S. Treasury would no longer be able to fulfill its financial commitments, would occur on Oct. 18.
"After that point, we expect Treasury would be left with very limited cash, that would be depleted quickly. And as we've seen in the past, and as this group knows, even delaying action can cause harm to business and consumer confidence, raise borrowing costs, disrupt financial markets and cause a downgrade of U.S. credit rating," she reiterated during Wednesday's meeting. "If Congress does not take action to raise the debt limit, Treasury's cash balance will reach an insufficient level to pay the nation's bills, and America would default for the first time in history. That default will call into question the full faith and credit of the United States. Our country would likely face a financial crisis, causing interest rates to rise quickly and restricting access to credit. Our fragile recovery would be thrown into reverse. We would likely experience a recession, millions of jobs would be lost, and the pain we'd endure will pass the resolution of the crisis."
On Monday, following weeks of deferring to Schumer and House Speaker Nancy Pelosi on the subject, Biden finally began a new offensive against McConnell and Republicans for refusing to allow Democrats to raise the debt limit by a simple majority vote.
"It's hypocritical, dangerous, and disgraceful," Biden said. "If you don't want to help save the country, then get out of the way."
During that event, the president confirmed that he had received a letter from McConnell reiterating the Republican position. He told reporters that he hoped to speak with McConnell about the standoff soon but that conversation had not taken place as of Tuesday, according to White House officials.
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Original Author: Christian Datoc