Biden warns ‘the whole world is in trouble’ if US defaults on debts

President Biden warned Wednesday that if the United States defaulted on its debt, it would spell trouble internationally, after his latest meeting with congressional leaders to raise the country’s borrowing limit hardly made a dent in the debate.

The president, during remarks in Valhalla, N.Y., said that world leaders are wondering about the looming risk of a default.

“They all are looking at me, ‘are you guys serious?’” Biden said, referencing world leaders. “Because, if we default on our debt, the whole world is in trouble.”

Tuesday’s meeting with the top four congressional leaders, including Speaker Kevin McCarthy (R-Calif.), resulted in no path forward to avoid default.

The meeting, which also included House Minority Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.), came just more than a week after Treasury Department Secretary Janet Yellen told lawmakers the U.S. could default by June 1.

Biden on Wednesday in New York called the risk of default a “manufactured crisis,” but warned about the consequences like higher interest rates for credit cards, car loans, and mortgages, delayed payments for Social Security and veterans, and job losses.

“Our economy would fall into recession and our international reputation would be damaged in the extreme. We shouldn’t even … be talking about this situation,” the president said.

Biden is set to meet with other world leaders later this month at the Group of Seven summit in Asia. The president was asked Tuesday if he would delay the international meetings to deal with the debt limit, and he said it’s a “possibility” but “not likely.”

Biden and the four top congressional leaders are set to meet again Friday, and their aides are continuing discussions in the meantime. 

McCarthy left the meeting Tuesday and said there was no movement made. Meanwhile, Biden confirmed he has been considering invoking the 14th amendment as a way to unilaterally work around the debt ceiling, and he said rescinding unspent COVID-19 relief funds is an area where he and lawmakers can agree to make some spending cuts.

After his speech, Biden will participate in two campaign receptions in New York City before returning to Washington. The visit to the Empire State comes two weeks after he officially announced his 2024 reelection bid.

A vulnerable Republican lawmaker in 2024, Rep. Mike Lawler (N.Y.), joined Biden for the Valhalla speech. Lawler said he accepted the White House’s invitation to attend because the president was going to his district and was talking about avoiding default.

Biden called out Lawler at the top of his remarks, saying “Mike’s on the other team” but praised him for not being a so-called MAGA Republican.

“Mike is the kind of guy that when I was in the Congress, that’s the kind of Republican I used to deal with. He’s not one of these MAGA Republicans,” the president said.