Top executives from 146 major companies in the U.S. — including Morgan Stanley, Goldman Sachs, Nasdaq, and Pfizer — have urged President Joe Biden and congressional leaders to act swiftly to prevent the U.S. from defaulting on its debt, which could occur as early as June 1. They warned of “potentially disastrous consequences” if the U.S. defaults on its debt obligations.
Executives Warn of ‘Disastrous Consequences’ From US Default
A total of 146 executives from major companies in the U.S. have jointly written an open letter to President Joe Biden and congressional leaders urging them to take swift action to save the U.S. from defaulting on its debt obligations.
Among the letter signers are Goldman Sachs CEO David Solomon, Morgan Stanley CEO James Gorman, Nasdaq CEO Adena Friedman, Guggenheim Partners Executive Chairman Alan Schwartz, and Pfizer CEO Albert Bourla.
Addressing President Biden, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Speaker Kevin McCarthy, and House Minority Leader Hakeem Jeffries, the executives wrote:
We write to emphasize the potentially disastrous consequences of a failure by the federal government to meet its obligations. Absent a resolution, the government is likely to run out of money as soon as June 1. Action to end the pending debt crisis is necessary now.
“Failure to resolve the current impasse could easily have more negative consequences,” they continued. “Although the American economy is generally strong, high inflation has created stresses in our financial system, including several recent bank failures.”
The executives added: “Much worse will occur if the nation defaults on our debt obligations, which would weaken our position in the world financial system. Large amounts of our $31 trillion debt are held by pension funds, individuals, and other governments.” They noted:
The inability to incur new debt would also threaten the government’s ability to pay its other bills, potentially including some payments to Social Security or Medicare recipients. This cannot be allowed to happen.
“We strongly urge that an accord be reached quickly so that the country can avert this potentially devasting scenario,” they concluded.
U.S. Treasury Janet Yellen has warned that the Treasury may not be able to pay all of the government’s bills as early as June 1. The Congressional Budget Office similarly estimated that the U.S. could default on its debt obligations in the first two weeks of June.
However, President Biden is “confident” that he can reach a deal with Republicans on the debt ceiling. Meanwhile, a group of Senate Democrats is reportedly circulating a letter urging him to prepare to invoke the 14th amendment to unilaterally resolve the debt ceiling standoff.
“I’m confident we’ll get the agreement on the budget and America will not default … We’re going to come together because there’s no alternative way to do the right thing for the country. We have to move on,” Biden said Wednesday. Former President and 2024 presidential candidate Donald Trump recently urged Republican lawmakers to let the U.S. default on its debt if the Democrats do not agree to spending cuts.
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