President Biden on Thursday called the prospect of the federal government defaulting on its debt “mind-boggling” but pushed back against Republican lawmakers seeking to leverage negotiations over raising the debt ceiling in exchange for spending cuts.
“If Republicans want to work together on real solutions and continue to grow manufacturing jobs, build the strongest economy in the world and make sure Americans are paid a fair wage, I’m ready,” Biden said in remarks on the economy in Springfield, Va. “But I will not let anyone use the full faith and credit of the United States as a bargaining chip.”
Biden’s comments come as the White House has staked out the position that it will not negotiate with Republicans over the debt limit. Administration officials believe the debt ceiling should be raised as part of a clean vote, without other conditions attached.
Some Republicans have argued the government should agree to cuts or reforms to major programs in order to limit future spending as part of any agreement to raise the debt ceiling. Even some moderate Republicans have suggested Biden will have to come to the negotiating table to hammer out an agreement.
“The very notion that we would default on the safest, most respected debt in the world is mind-boggling,” Biden said. “I’m not going to get into the reckless threats that take the economy hostage in order to force an agenda that’s going to only limit American workers and weaken us internationally. I won’t let that happen.”
Biden placed much of the blame for the state of the debt on his predecessor, noting that roughly 25 percent of the current national debt total was accumulated during the Trump administration. The Biden administration has argued its spending bills are paid for and will ultimately cut the debt by nearly $2 trillion. But that amount is a drop in the bucket compared to the total debt, which is nearly $31 trillion.
Congress must act to raise the debt limit in the coming months, or the U.S. will default. The debt limit allows the government to pay money it has already approved, not cover new spending.
White House officials and economists have warned that failing to raise the debt limit could result in economic catastrophe, including job losses, a stock market decline and the loss of government services for veterans, seniors and other Americans.
Biden’s remarks on Thursday came as part of a broader speech on the economy, where he touted the accomplishments of his first two years in office while lambasting House Republicans for some of the proposals they’ve put forward since regaining the majority this month.
He mocked the GOP for a bill proposal that would establish a 30 percent national sales tax, noting that Speaker Kevin McCarthy (R-Calif.) has said he opposes the idea.
“The Republican Speaker says he’s not so sure he’s for it,” Biden said.
Administration officials have also criticized a House GOP bill that would restrict releases from the Strategic Petroleum Reserve, arguing it would limit the federal government’s contingency options in times of crisis and potentially drive up oil prices.
Biden’s economic speech on Thursday served as something of a preview of the months to come as he hits the road to pitch voters on his agenda and accomplishments of the past two years in preparation for a likely 2024 campaign announcement.
The president touted the benefits of the bipartisan infrastructure law and a bipartisan bill to boost investments in semiconductor chip manufacturing, both of which he said would create good-paying jobs and revitalize communities.
He also highlighted passage of the Inflation Reduction Act, which passed with only Democratic votes and funds key White House priorities like cutting health care costs and increasing investments in green technology intended to combat climate change.
Biden said Thursday he is tapping several top administration officials to lead an “Invest in America” Cabinet that will ensure those bills and other parts of his economic agenda are used to maximize job creation. Members including the secretaries of Transportation, Labor, Commerce and Energy, as well as senior White House advisers like Mitch Landrieu, who oversaw implementation of the infrastructure bill.