WASHINGTON — President Joe Biden met with business leaders on Wednesday to warn of the disastrous economic impact the country and global economy would face if the U.S. hits the debt limit for the first time ever.
Shortly after the meeting began, Senate Minority Leader Mitch McConnell announced that he would support a debt limit extension into December. McConnell’s offer is a short-term fix that averts the government’s Oct. 18 default deadline, but sets up for a similar showdown later this year. Democratic leaders have not said whether they will agree to his offer.
CEOs and business leaders, who joined Wednesday’s meeting both virtually and in-person, warned that even the potential threat of a default is enough to negatively impact the economy, suggesting that the pressure for Congress to take more long-lasting action will remain high.
“From an economic perspective, we need to resolve this issue very quickly. Every day of delay right now comes at an increasing price,” said Jane Fraser, CEO of Citigroup. “We just can’t wait until the last minute to resolve this. We are, simply put, playing with fire right now.”
Biden had called together the group of CEOs and business leaders from some of the nation’s largest financial institutions as the White House had attempted to ramp up pressure on Senate Republicans to back down from their promise to filibuster a bill extending the borrowing limit through Dec. 2022.
“The Senate Republicans’ position I find to be not only hypocritical but dangerous and a bit disgraceful, especially as we’re crawling our way out of a pandemic,” Biden said in remarks at the start of the meeting. “Our markets are rattled, America’s savings are on the line.”
The Treasury Department has said that it would be unable to pay the country’s bills if the debt limit is not raised or suspended by Oct. 18. Experts have warned that a default would have catastrophic economic impacts.
Biden had urged McConnell for days to drop the filibuster and let Senate Democrats pass the bill on their own. At least 10 Republican votes would be needed to break the filibuster. The House has already passed the bill.
“If they don’t want to do the job, just get out of the way,” Biden said Wednesday of Republicans, calling their commitment to block the bill a “cynical, destructive partisan ploy.”
Biden asked the CEOs and business leaders to explain how defaulting would impact everyday life as well as the global economy.
Nasdaq CEO Aadena Friedman said there was already some volatility in the markets due to the uncertainty. Allowing the country to default would lead to higher prices for consumers, delays in payments to federal programs such as social security, and would hurt retirement accounts, she said.
“Hardworking Americans will ultimately bear the burden,” Friedman said.
JPMorgan Chase CEO Jamie Dimon, who once chaired the influential lobbying group Business Roundtable, warned that the effects of a potential default could range from a nationwide recession to a “complete catastrophe for the global economy.”
“I don’t know why anyone would take a chance like that,” he said. “This is a time I think where we should show American competence, not American incompetence.”