Biden's criticism comes just as Congress faces Oct 18 deadline to approve more borrowing to keep government running after it has accumulated $28.4 trillion in total public debt. McConnell has forced Senate Democrats to a lengthy process that could drag out for weeks, and which could leave little room for error.
McConnell and Biden have both promised that the country would not default. However, the public fight and political posturing could lead to an economic meltdown. Global economic stability depends on U.S. Treasury Notes. Unpaid debt could cause financial market collapse and send America into recession. Biden stated that the debt limit is for borrowing that has occurred before, even under former President Donald Trump. Republicans are causing harm to the country by blocking suspension.
Biden stated at the White House that "they need to stop playing Russian Roulette with the U.S. economic system." "Republicans need to allow us to do our jobs. Get out of the way. You don't have to save the country. Get out of the way.
The need to increase the national debt limit was once a routine vote. But it has become more partisan. Republicans have made it a favorite political tool to force Democrats to vote against more borrowing or demand concessions. McConnell tied the vote to Biden’s multitrillion dollar tax and economic agenda that awaits Congressional approval. Biden claims that the cost of his plan's debt will not exceed $400,000 and can be paid for through higher taxes on corporations as well as on the wealthy. House Democrats define the rich as those who earn more than $400,000 per year or married couples earning more than $450,000.
Biden stated that he would talk to McConnell. McConnell dug in with his own letter to the president.
"We don't have a list of demands. "We have been warning you for two and a quarter months that your party wants to govern itself, so it must also handle the debt limit," the Kentucky senator wrote in a Monday letter.
With 10-year Treasury notes at just 1.5%, the financial markets remain relatively calm. This rate is slightly higher that the record lows last year due to the coronavirus pandemic, but still lower than any time in the 60-year history of Federal Reserve data.
Janet Yellen, Treasury Secretary, has stated that the government will run out of cash on October 18, which she believes would lead to a financial crisis and an economic recession. On Monday, Chuck Schumer, Senate Majority Leader, warned that the economy would be at risk if it came any closer to that date.
Schumer wrote to Democratic senators, "The consequences of even nearing the X date could prove disastrous for our economy. It could also be devastating to American families. It will raise the cost of borrowing for average Americans and hinder our economic recovery over long-term."
Republicans and Democrats are at odds over how to extend the debt ceiling. Republicans insist that Democrats use the same legislative tool as is being used to pass Biden’s plan to improve safety net, health, and environmental programs to get it done. Democrats claim that the extension of the debt limit is a bipartisan effort. The debt cap was established under both presidents.