Mr. Biden: America will not default

President Biden said the US would avoid a default scenario, in the context of negotiations between the White House and Congress "have worked".

"There will be no default," US President Joe Biden said on May 25, adding that his negotiations with House Speaker Kevin McCarthy "have worked".

White House press secretary Karine Jean-Pierre said the Biden administration and Congress negotiated online on May 25, but did not specify what budget proposals the two sides had made to be able to be approved. Congress, where Democrats control the Senate and Republicans hold the House, passed.

"Both sides have to understand that they can't get everything they want," Jean-Pierre said, adding that "defaulting is not an option" because it could cost the US 8 million jobs. devastate retirement accounts".

US President Joe Biden speaks in the Rose Garden, the White House on May 25. Photo: AFP

The US in January hit the public debt ceiling of $31.4 trillion set by Congress. The Treasury Department must take special measures to keep the government functioning and warned the US could default on its debt from June 1. President Biden and US congressional leaders held several rounds of talks but made no progress.

Republicans want the US government to cut spending drastically to raise the debt ceiling. Mr. Biden denied and accused Republicans of pushing the world's number one economy to the brink of default. Asked if Mr Biden had an "emergency plan B" if negotiations failed, Jean-Pierre said "the only option right now is for Congress to do their job".

Mr Biden said he and Mr McCarthy had "very different views on who should bear the brunt of the budget adjustment". "I don't think the entire burden should be placed on the middle class and working Americans. Republican friends in the House disagree," according to the White House boss.

House Speaker McCarthy said Republicans and Democrats are racing against time to reach an agreement to avoid default. "The situation is difficult but we have been working hard to handle this," he told reporters on May 25.

Economists warn that default will create many serious consequences for the US economy as well as social security. With the US government unable to pay its debt obligations, financial markets affected, the Treasury Department may have to delay payments for about 66 million people receiving monthly benefits.

Mr. Biden talked about the possibility of bypassing congressional power to avoid defaulting on the US debt
President Biden has said he has the power to invoke the 14th Amendment to avoid US default, but acknowledged the potential legal challenges of the measure.

"I think we have the authority to do so. The question is whether it can be done and invoked in a timely manner. That's an unresolved issue," US President Joe Biden said on May 21. mentioned the possibility of triggering the 14th Amendment beyond congressional authority.

The White House boss also acknowledged the legal challenges of this measure, saying that this is not an option that can be used in the short term, when the time when the US is forecasted to default is only a few weeks away.

The US president added that all four congressional leaders at a recent meeting agreed that the country would not default on its debt, leading him to expect that there is no need to resort to the 14th Amendment.

US President Joe Biden in Hiroshima, Japan, on May 21. Photo: AFP

This is considered the toughest statement ever by the US President about the activation of the 14th Amendment, which is a matter of debate between legal experts and US government officials in the context of this country. gradually approaching the risk of default.

President Biden will continue to negotiate with House Speaker Kevin McCarthy about raising the debt ceiling on May 22. The parties had previously gone through many rounds of negotiations, but had not yet reached a consensus.

Under the 14th Amendment, the president of the United States can override congressional authority if the failure of the White House and Congress to raise the debt ceiling is deemed unconstitutional. At that time, the US Treasury can continue to borrow money beyond the debt ceiling to keep the government operating.

However, US officials warn these moves could backfire. In addition, Republicans can also sue the Biden administration for exceeding executive authority, with the litigation process likely to go to the Supreme Court, affecting the reputation of the US.

The US in January hit the $31.4 trillion public debt ceiling set by Congress, forcing the Treasury Department to take special measures to keep the government afloat. Treasury Secretary Janet Yellen warned that the US could default on its debt on June 1 if Congress does not address the issue of raising the public debt ceiling.

Economists warn that default will create many serious consequences for the US economy as well as social security. With the US government unable to pay its debt obligations, financial markets affected, the Treasury Department may have to delay payments for about 66 million people receiving monthly benefits.