Meanwhile, Treasury Secretary Janet Yellen says “all responsible members of Congress must agree to raise the debt ceiling”.
Bank of America is bracing for a potential US debt default, says chief executive Brian Moynihan. He is not in favor of completely eliminating the debt ceiling as some lawmakers have proposed.
Bank of America CEO Brian Moynihan on the Possible US Debt Default
Bank of America CEO Brian Moynihan discussed the possibility of the US defaulting on its debt in an interview with CNN on Monday, as Congress is in conflict over raising the debt ceiling again.
While emphasizing that he hopes lawmakers will solve their problems, the Bank of America executive warned that the country’s debt default remains a possibility that cannot be ignored. He was quoted as saying the following:
“We have to be prepared for that, not only in this country but in other countries around the world … You hope it doesn’t happen, but hope is not a strategy — so you prepare for it.”
The CEO of the second largest banking firm in the United States warns that the Democratic government is not undertaking austere fiscal measures, quite the opposite, and refuses to allow a constructive negotiation with the political opposition.
Congress Urged to Raise the US Debt Ceiling
Several lawmakers have proposed legislation that would remove the US debt ceiling altogether. Moynihan is not a fan of the idea. Asked if the US should remove its debt ceiling, the Bank of America chief said: “There’s got to be an argument about how we make sure we live within our means as a country … I think we should leave it alone and make sure it operates correctly.”
President Joe Biden’s administration is pressing for a rapid lifting of the public debt ceiling, which has already reached the limit set at US$ 31.4 trillion (or trillion for its English translation), but at the same time proposes adding an amount additional US$ 4.8 trillion to the fiscal deficit until the year 2031.
The Republican opposition both in the Senate, led by Mitch McConnell, and in the House of Representatives, led by Kevin McCarthy, offers a constructive negotiation with the ruling party: approving the lifting of the public debt ceiling is proposed, in exchange for allowing the adjustment of public spending, just as it happened in the Clinton administration. The democrats still resist the negotiation, and jeopardize the credibility of the federal government.
Treasury Secretary Janet Yellen warned Monday that the US government risks “economic and financial catastrophe” if Congress fails to pass a bill to increase the $31.4 trillion debt limit.”
Yellen believes that the US economy is not going to fall into recession. “Last month we created more than 500,000 jobs, more than 12 million since the president took office, and inflation is coming down,” she claimed.
By Audy Castaneda
