The White House warned that a failure by Congress to extend the nation’s debt limit could plunge the economy into a recession and throw millions of Americans out of work
Congress plans next week to consider legislation that would avoid a default ahead of an October deadline, when the Treasury Department estimates it will no longer be able to pay all of the country's bills.
The U.S. House of Representatives is set to vote next week on a measure to resolve the showdown and a "continuing resolution" that could fund emergency spending on wildfire and hurricane disaster relief as well as the evacuation of refugees from Afghanistan, according to a letter from Majority Leader Steny Hoyer to colleagues.
Republicans, who lost control of the White House in the 2020 election, have balked and placed the potential crisis on Democrats' shoulders. Democrats hold control of the House and Senate by slim margins.A new White House fact sheet warned that the failure to come to an agreement could send ripples through U.S. financial markets and halt billions of dollars in aid for disaster relief efforts, infrastructure and education funding, not to mention the response to the COVID-19 pandemic.
Investors continue to bet that an increase or suspension of the debt ceiling will take place in time to avoid a default of any kind, but Goldman Sachs economists wrote in a note this week that the current go-round over the issue is "the riskiest debt-limit deadline in a decade."
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