Biden Now Says Republicans Will Be To Blame for Long-Expected Recession

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May 11, 2023

VALHALLA, N.Y. (Reuters)—President Joe Biden pressured Republican lawmakers on Wednesday to move quickly to raise the country's $31.4 trillion debt ceiling or risk throwing the U.S. economy into a recession that would kill thousands of jobs.

"We've got to fight. We're going to win this fight," Biden said at a flag-bedecked event at Westchester Community College in Valhalla, New York.

Experts have been anticipating an economic recession since the beginning of the year due to the Federal Reserve's rapid increase of interest rates to fight runaway inflation. "With both inflation and interest rates persisting at higher levels than previously expected, economists put the same probability of a recession at some point in the next 12 months at 61 percent, as they did in January," the Wall Street Journal reported last month.

Biden made his case in a congressional district that Republicans won by a narrow margin in November, as his aides and staff for congressional leaders met in Washington in a desperate search for common ground ahead of a June 1 deadline.

The Treasury Department says the government will be unable to pay its bills as early as June 1.

Republicans are vowing to support raising the debt ceiling only if Biden agrees to retroactive reductions in government spending. Biden wants the debt ceiling lifted without spending cuts attached, but said he wants to negotiate the next budget.

Biden warned that the post-pandemic economy would be destroyed by a government default, and he listed programs that would be slashed if Republicans get their way, like suicide prevention for veterans.

"This is no time to put all this at risk, to threaten a recession, to undermine America's standing in the world. Republican threats are dangerous and they make no sense," he said.

Biden also said the fossil fuel industry wants the government to eliminate tax credits for individuals and businesses for installing energy-saving devices.

"Here's the real truth: Big Oil doesn't want it, and Republicans are carrying their water," he said.

Biden spoke a day after he met with top Republican and Democratic lawmakers for the first time in three months to try to move forward on the debt ceiling and avoid a historic default.

The White House has dubbed the Republican budget-cutting proposal the "Default on America" act.

White House aides are meeting with congressional leaders' staff in Washington daily before Biden and the leaders meet again on Friday.

During a CNN town hall on Wednesday, former president Donald Trump, who is running for reelection, encouraged Republicans to play hardball and downplayed the economic risks of a default, saying, "It's psychological. It could be very bad. It could be maybe nothing."

The college where Biden spoke is located in a suburban district represented by Republican congressman Mike Lawler, one of a handful of New York Republicans who unseated Democrats in 2022, giving their party its narrow 222-213 House of Representatives majority.

Lawler appeared at the event but did not speak.

Democrats view Republican House members who narrowly won election as possibly vulnerable to being pressured into breaking with their party's leadership and voting for a bill to raise the debt ceiling without conditions.

(Reporting by Nandita Bose in Valhalla, additional reporting by Steve Holland, Susan Heavey and Jasper Ward in Washington; Editing by Heather Timmons, Stephen Coates, Bill Berkrot and Cynthia Osterman)

Published under: Debt Ceiling , Economy