Top business lobbying groups called for a debt ceiling compromise Tuesday ahead of a highly anticipated meeting between President Biden and congressional leaders.
Corporate America is concerned that Congress won’t reach a deal by June, when the federal government is expected to run out of ways to pay its debts. Economists broadly believe that a default would devastate the U.S. economy.
The U.S. Chamber of Commerce, the largest business group in the nation, explicitly backed spending caps as part of a debt ceiling deal Tuesday. The Chamber also called for lawmakers to ensure the deal includes permitting overhauls, a top priority for the organization.
“The full faith and credit of the United States government should never be placed at risk, which is why it is essential that Congress and the Administration quickly reach a bipartisan agreement to raise the debt ceiling,” Neil Bradley, the Chamber’s chief policy officer, said in a statement.
The statement deals a blow to Biden, who has been pushing business leaders to publicly support a “clean” debt ceiling raise, or one with no conditions attached. He’s accused Republicans of holding the U.S. economy hostage by tying the debt limit to GOP priorities such as spending cuts.
The Retail Industry Leaders Association, which lobbies on behalf of large retailers, urged Congress to reach a bipartisan deal, warning that a misstep would “subject businesses and consumers to an economic shockwave.”
“There are principled men and women serving in government in both political parties who understand the country cannot continue to prosper if we continue to govern from the edge of a cliff, budgeting from crisis to crisis without meeting our long-term obligations and setting a course of stability,” Michael Hanson, the group’s senior executive vice president for public affairs, said Tuesday.
The Republican-led House last month passed a bill to raise the debt ceiling and enact massive spending cuts. The bill, which doesn’t stand a chance in the Democratic-controlled Senate, is viewed as a starting point in negotiations.
A March report from Moody’s Analytics found that a prolonged default would cause millions of layoffs, send interest rates soaring and undermine investor confidence in the U.S.
“A default would deliver a severe blow to the economy, leading to widespread job losses, decimated retirement savings and higher borrowing costs for families, businesses and the government,” Business Roundtable CEO Joshua Bolten said Monday.
“Securing a bipartisan path forward to raise the debt ceiling could not be more urgent. The cost of a default, or even the threat of a default, is simply too high.”
The standoff could also risk a constitutional crisis if the Biden administration sought to override Congress through the 14th Amendment, which states that the validity of U.S. debt “shall not be questioned.”
“What to do if Congress fails to meet its responsibility? There are simply no good options, and the ones that you’ve listed are among the not good options,” Treasury Secretary Janet Yellen told ABC when asked about the 14th Amendment Sunday.
Updated 4:20 p.m.