President Joe Biden said on Tuesday that the U.S. has never failed to repay its debt but the country was being held hostage by MAGA Republicans.
What Happened: Biden tweeted that "America is not a deadbeat nation."
"We have never, ever failed to pay our debt. But MAGA Republicans are engaged in reckless hostage-taking by threatening to force America into default."
The president described the situation as "dangerous and wrong."
Biden and House Speaker Kevin McCarthy (R-Calif.) are due to meet on May 9 after Treasury said recently that the government could run out of cash by June.
Previously, McCarthy had accused Biden of putting the U.S. economy in jeopardy by "not doing anything."
The House Speaker had at the time implored the president to put forward his plan and accused him of inaction.
Why It Matters: Earlier in the week, Treasury Secretary Janet Yellen asked Congress to raise the debt ceiling so that the government can pay its bills beyond June 1, according to a prior report.
Late in April, The House Of Representatives narrowly passed a bill to raise the debt ceiling but it also called for significant cuts in spending over the next decade.
The bill isn't expected to clear the Senate and Biden would veto it if it did so, according to White House Press Secretary Karine Jean-Pierre.
"President Biden will never force middle class and working families to bear the burden of tax cuts for the wealthiest, as this bill does," said Jean-Pierre.
On Tuesday, U.S. Treasuries had a negative trading session as the yield on the three-month paper shot up 18 basis points to 5.23% amid the debt ceiling worries.
The cost of insuring against a U.S. debt default, as measured by the 5-year credit-default swap, rose to above 60 basis points the same day — This is the highest level since March 2009.
This illustration was generated using artificial intelligence via MidJourney.
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