As GOP obstructs, Biden escalates warnings of default

WASHINGTON (AP) — President Joe Biden is escalating his campaign to get Congress to lift the federal debt limit, hosting business leaders at the White House Wednesday and warning in a new report that failure to extend the government's borrowing authority could set off a global financial crisis.

The moves come amid indications Democrats may change Senate filibuster rules to get around Republican opposition.

Biden will host a number of CEOs — including the heads of banks like Citi, JP Morgan Chase and Bank of America — to underscore the severe ramifications if the government runs out of money to cover its bills.

Ahead of the meeting, the White House warned that if the borrowing limit isn't extended, it could set of a global financial crises that the United States may not be able to manage.

“A default would send shock waves through global financial markets and would likely cause credit markets worldwide to freeze up and stock markets to plunge,” the White House Council of Economic Advisers said in a new report. “Employers around the world would likely have to begin laying off workers.”

The recession that could be triggered could be worse than the 2008 financial crisis because it would come as so many nations are still struggling with the COVID-19 pandemic, the report said. It was first obtained by The New York Times.

Congress has just days to act before the Oct. 18 deadline when the Treasury Department has warned it will run short of funds to handle the nation’s already accrued debt load.

The Senate, meanwhile, is scheduled to vote Wednesday on whether to take up a bill to suspend the debt limit, but Republicans are again expected to block it.

To get around the GOP standoff, Biden indicated in off-the-cuff comments Tuesday Democrats are weighing a procedural change.

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