"Failure to meet our existing obligations would be irresponsible and cause irreparable damage to the economy and American taxpayers," warned these organizations representing the banking and financial sector in a letter to elected officials.
The debt ceiling has been in effect again since August 1, after two years of suspension thanks to an agreement between the Trump administration and Congress. Without a new deal, the United States will run out of money "during the month of October," Treasury Secretary Janet Yellen warned last week.
Also Read: US Treasury Secretary Urges Congress To Raise Debt Ceiling
The country's level of commitments against the debt ceiling is "frightening for consumer confidence and for confidence in US businesses and potential credit ratings if we do not make sure to raise that ceiling," commented the Amazon boss Andy Jassy, also on CNBC on Tuesday.
Democrats want opposition backing to raise debt ceiling
Leader of the Republicans in the Senate, Mitch McConnell, meanwhile told Democrats they should fend for themselves. “Democratic leaders have all the tools and procedures they need to manage the debt limit on their own, the same way they choose to manage everything else,” he quipped Tuesday, in reference to a provision allowing the majority to pass its bills with its sole votes.
The Democrats are therefore considering bypassing the Republicans to adopt Joe Biden's social spending plan of $ 3.5 trillion.
On the other hand, they would like to obtain the support of the opposition for raising the debt ceiling. Senate Democrat Leader Chuck Schumer recalled that “when President Trump was in power, Democrats worked three times with Republicans to suspend the debt ceiling and continue to ensure that the United States was in power. able to pay their bills ”.
“If the United States defaults on its debt, it will hurt all Americans. (...) The consequences would reverberate around the world, and this could cause irreparable damage to the global economy at a time when we are all working to get out of a unique pandemic in a century, ”he said. he alerted.
Blockages sanctioned in the past
The country would then no longer be able to repay its loans, pay the salaries of federal employees or their pensions. It would also trigger a global financial blast, and increase short-term borrowing costs for households.
In 2011, the rating agency Standard and Poor's withdrew its “AAA” rating in the country, sanctioning long months of political deadlock on the same subject.