December 9, 2023

The Queens County Citizen

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Increasing the loan limit | The United States could enter a “recession” if a deal is not reached

Increasing the loan limit |  The United States could enter a "recession" if a deal is not reached

(Washington) Joe Biden’s administration warned on Sunday that the United States could enter a “recession” that could lead to the loss of “millions of jobs” if a deal on raising the debt ceiling fails.

“If Congress fails to raise the debt ceiling before default, we will enter a recession and that will be catastrophic,” Treasury Deputy Secretary Wally Adeyemo warned again on CNN.

“The United States has never defaulted on debt, and we shouldn’t,” he insisted, explaining that such a situation would mean the loss of “millions of jobs.”

The government and financial institutions have been warning for weeks about the risk of a default that could run the country from June if no deal is found in Congress.

Democrats and Republicans continue to be deadlocked over the debt limit, with Republicans refusing, for now, to raise it without massive budget cuts, which Joe Biden has rejected.

Mr. Adeyemo on Sunday highlighted the efforts of the president who unveiled in March a plan that provides for “$3000 billion in deficit reduction over ten years”.

The Treasury spokesman also welcomed the “constructive” discussions taking place between the various parties.

A new meeting between President Joe Biden and congressional leaders is scheduled for early this week on the issue.

Joe Biden, who visited Delaware in the northeastern part of the country, briefly mentioned the matter on Saturday.

“We are moving forward,” he assured the press, referring to a “real discussion” but admitting that a deal has yet to be reached.

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The debt of the world’s largest economy reached $31 trillion on January 19, beyond which the country can no longer issue new loans for financial assistance.

Without a deal, the United States could find itself in payment default starting in early June, the Congressional Budget Office (CBO) recalled on Friday.

This unprecedented situation where a country can no longer pay its bills and civil servants weakens the global economy.

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