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Biden enlists bank CEOs, AARP in push to raise debt ceiling 12 days before deadline


U.S. President Joe Biden gives remarks from the State Dining Room of White House Washington, U.S. Oct 4, 2021.

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President Joe BidenIn a meeting with Wall Street’s CEOs, Will will reiterate his calls for Congress on Wednesday to resolve the debt ceiling.

Nine executives are expected to be there, including JPMorgan Chase CEO. Jamie DimonPat Gelsinger (Intel exec), Adena Friedman, chief Nasdaq of Nasdaq, and Greg Hayes, Raytheon leader, are also on the guest list. The guest list also includes Jo Ann Jenkins (AARP), Jane Fraser (Citi CEO) and Punit Renjen (Deloitte exec).

Treasury Secretary Biden will also be joining Biden Janet YellenGina Raimondo, Commerce Secretary and Cedric Richmond, White House Senior Advisor.

According to White House statements, the group will talk about the “urgent necessity for Congress to immediately take bipartisan action to address debt limit and prevent default on U.S. government financial obligations and economic catastrophe that could follow.” Republicans are also to blame for the drama, as they blocked a normally routine legislative process.

A mix of online and in-person participants will attend the White House meeting. This is a significant step forward in President Obama’s attempts to stop what economic experts call “certain economic trouble.” Congress has only 12 days—until October 18—to suspend or lift the debt limit before the U.S. defaults on its debt for the first time ever, according to Treasury Department estimates.

Yellen along with other economists warn against the possibility of a sudden rise in interest rates, which could weaken America’s dollar, and put a halt to the greenback’s role as the reserve currency.

The White House Council of Economic Advisors stated Wednesday that “Financial Markets would lose faith” in the United States and the dollar would decline, while stocks would plummet. It also noted that U.S. credit ratings would be almost certain to fall and that interest rates for most consumer loans would increase, such as auto loans and mortgages.

According to the council, “These and other outcomes could cause a recession as well as a credit market freeze which could affect the ability of American firms to function.”

A default could delay Social Security payments to 50 million seniors and put off income for members of the U.S. Armed Services.

CNBC interviewed Yellen Tuesday, saying that she was ready to “adopt” a new system.fully expect” a default to lead to a recessionIt is. Suspending or raising the debt limit allows Treasury Department to make regular payments of U.S. bondholders to cover spending bills that have been authorized.

Biden will likely use Wednesday’s meeting to ask the private sector for help in keeping pressure on Congress Republicans to drop their threats to filibuster any bill that is being considered by regular Senate procedures.

Recent days have seen the President intensify his criticisms of GOP leaders for blocking the vote on debt ceiling. The GOP threatened to filibuster any bill seeking to suspend or raise the limit by threatening to filibuster. According to the White House, Biden will reaffirm his criticisms in his meeting Wednesday with CEOs.

The White House stated that “The President will outline the Republican obstructions that have led us here, and the GOP’s refusal to do the right things by fulfilling its bipartisan obligation to address the debt limit,”. “The President will also reiterate the cost of any delay – with each day of Republican obstruction and political games increasing the risk that even a near-miss default would result in more costs for middle-class families.”

Republicans are asking Democrats to resolve the debt limit through a budgetary special known as reconciliation. This process requires only a 50 vote majority and does not require GOP support.

It appeals to Senate Major Leader Mitch McConnell from Kentucky, who wants to consolidate Republican seats for the 2022 midterm elections. McConnell is able to save Republicans from voting in favor of a higher debt ceiling and protect his caucus against primary challengers who seek to label incumbents irresponsible spenders.

McConnell stated that McConnell had implored him to “not play Russian Roulette with the American economic,” during Tuesday’s press conference. “They need to do this, they have the time to do it and the sooner they get about it the better, to make sure the  markets and the American people know that as usual, the American government will never, ever default.”

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McConnell was asked how it is possible to force budget reconciliation in order to increase the debt ceiling. He said that this would be easier than Republicans filibustering, and also allow the same 50 vote majority vote.

To lower the threshold from 51, it would be necessary to get consent from all Republicans. “I can’t think that this would occur,” he stated. “But that won’t happen because we have been insisting for the past two months on their need to do so. This is the only way to do the job.

Republicans could continue their threats and force Democrats to include a debt limit hike in any reconciliation bill.

Democrats already have a bill in reconciliation that aims to collect trillions for climate and poverty spending. They would probably need to introduce a second similar bill before the Oct. 18 deadline to get a limit raise.

This option may not be liked by Democrats, as it forces them to increase the limit rather than suspending it. Instead of having it cap at a dollar amount, suspensions allow the government’s to issue new debt over a specified period.

Linking the Democrats to a massive dollar figure — the product of spending and tax cuts approved by both parties — could make for bad optics during the 2022 midterm elections.