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Most economists warn that a failure to raise the debt ceiling by
June 1, when the U.S. Treasury says the government will start to run
out of money to meet its obligations, will trigger a catastrophic
economic recession with the loss of millions of jobs.
Democratic President Joe Biden and Republicans who control the House
of Representatives are negotiating raising the debt limit, which is
a mechanism to allow the government to pay obligations Congress has
already incurred, such as payments on foreign debt and monthly
Social Security checks.
In a televised CNN town hall appearance, Trump said Congress should
claw back money allocated in Biden's domestic spending legislation.
"If they don't ... you'll have to default," Trump said. He added
consequences of a default could merely lead to "a bad week or a bad
day."
Republicans are insisting on massive spending cuts before they agree
to pass a debt ceiling increase. Biden so far is insisting on a
"clean" measure without conditions.
Economists say threats by some Republicans not to raise the debt
ceiling by June 1 is a dangerous game of Russian roulette with the
U.S. and global economy, as a failure to raise it will trigger the
first U.S. default in the country's history.
The debt limit was raised three times without a fight during Trump's
four years as president, a period when the national debt also
exploded because of his tax cuts.
(Reporting by Tim Reid; Editing by Howard Goller)
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