White House calls US default a 'gift' to Russia

The US Capitol Building in Washington DC. Photo: Getty

White House press secretary Karine Jean-Pierre said that if the US defaulted on its federal debt, it would be a gift to Russia, China and other US competitors.

Ms. Jean-Pierre asked the US Congress to "fulfill its responsibility, act quickly and prevent default."

At the same time, the White House press secretary also reiterated the warning of Director of National Intelligence Avril Hayners, who pointed out that Russia and China could "take advantage of this opportunity" in the information field.

The United States is witnessing the fiercest confrontation in many years, when the Democratic and Republican parties cannot find a common voice on the issue of the public debt ceiling. The Republicans have proposed "belt-tightening" conditions when increasing the public debt ceiling. Meanwhile, President Joe Biden and the Democrats strongly oppose it. The Democrats emphasize that the US Congress must approve the increase of the debt ceiling unconditionally, without any trade-offs.

Neither side is willing to compromise, and if no agreement can be reached, the US could default on its debt. This would accelerate the economic downturn, especially as successive interest rate hikes by the US Federal Reserve to curb inflation have increased borrowing costs for households and businesses and slowed bank lending. In addition, the unemployment rate, which is currently at a historic low of 3.5%, would also rise. Many leading economic policymakers predicted in December 2022 that the unemployment rate could rise by about 1 percentage point by the end of 2023.

Previously, Treasury Secretary Janet Yellen announced that the US is at risk of defaulting on June 1 if the debt ceiling is not raised.