With two weeks until the United States defaults on its debt, the White House is looking to allies in the business community to help pressure Senate Republicans to choose to raise the debt ceiling instead of chaos.
White House officials have quietly been dialoguing with leaders of major business lobbying groups for weeks, including the U.S. Chamber of Commerce, the National Association of Manufacturers, the Business Roundtable, and other major influencers in the financial sphere, according to industry leaders and two administration officials. The administration is hoping that the interest groups—historical allies of small-government Republicans on issues like lower corporate tax rates and cutting regulations—might be able to leverage those relationships in order to boost support for raising the debt ceiling, thereby averting a worldwide financial meltdown.
“They’re looking to the business community to speak out and take a stand,” said a senior staff member at the National Association of Manufacturers, the nation’s largest industrial trade association. While industry is universally opposed to the United States defaulting on its debt—which could double the unemployment rate and wipe out $15 trillion in household wealth, according to a Moody’s Analytics report that called the potential scenario “cataclysmic”—the White House is pushing business groups “to make it a priority,” the senior staff member said.
“We are in regular communication with the Administration and congressional leaders on this critical issue,” said a senior official with the Business Roundtable, pointing to remarks by Joshua Bolten, the group’s president and CEO, last week in which he called the semi-annual debt ceiling brinksmanship “nuts.”
Many business groups have long seen the debt ceiling, and the increasing frequency of manufactured crises over potentially not raising it in order to extract policy concessions from the party in power, as an unnecessary headache that courts potential economic disaster. The U.S. Chamber of Commerce, the nation’s largest lobbying group, has called for the debt limit to be scrapped entirely.
The drumbeat from business groups has slowly gained steam in the last several weeks, as belief that Senate Minority Leader Mitch McConnell (R-KY) could be bluffing gave way to the realization that Republicans were serious in their opposition to helping Democrats raise the debt limit. Within a seven-day period, 25 of the largest trade groups representing the banking, real estate, manufacturing and investment industries signed three separate letters addressed to congressional leaders encouraging Congress to fulfill its obligations to its creditors.
McConnell has insisted Democrats can raise the debt limit by themselves—but has blocked efforts to do so through a simple 50-50 majority. Instead, the Republican leader is intent on forcing Democrats into a lengthy process that could take weeks—an opinion Democratic leaders have, so far, resisted.
Other business leaders have been increasingly vocal in their frustration—even anger—with Republican allies on the issue on their own time, warning that the looming debt ceiling crisis could send the fragile global economy into a potential freefall. On Tuesday, Amazon CEO Andy Jassy said in an interview on CNBC that even the debate over raising the debt ceiling was “scary for consumer confidence and for confidence in U.S. businesses and potential credit ratings.”
“If you look at our debt commitments, and you look at where the debt ceiling is, it’s a little concerning,” Jassy said. “I know that’s going to be debated in Washington, but I hope we take care of it sooner than later in Congress.”
Even so, the Biden administration’s relationship with the business community is occasionally rocky—and agreement on lifting the debt ceiling hasn’t smoothed over the president’s aims to raise the corporate tax rate. The U.S. Chamber of Commerce, while meeting with and supporting the administration in its approach to the debt ceiling, has been vocally opposed to the president’s trillion-dollar economic package in recent weeks, with the group’s chief policy officer, Neil Bradley, said Monday that it’s “crucial” for the business community to do “everything in our power to ensure the reconciliation bill does not pass.” But the looming possibility that Republicans could nuke the economy just to troll the libs has brought Biden and business groups together.
“Business Roundtable has a longstanding position that the prospect of the U.S. defaulting on its debt poses an unacceptable risk to our economy,” Bolten said. “The BRT message is, just get it done. It’s unacceptable to risk a default and however they need to get it done is what we’ll support.”
Biden will cap the weeks-long outreach efforts by meeting with as-yet-unnamed business leaders on Wednesday, a move first reported by CNN, in a move intended to illustrate the universal consensus that the debt ceiling must be raised—and to pressure Republicans to stop playing chicken with the nation’s credit.
The administration’s message to the community is simple, according to a White House official: a default on America’s debt would be an economic catastrophe—one that can be avoided by congressional Republicans simply doing what had been done for decades with almost no drama or staring contests. The official noted that McConnell’s “do it yourself” approach to the debt ceiling spells more brinksmanship down the road when the debt limit inevitably needs to be raised again, but emphasized that the nation’s economy, still shaky after the pandemic pushed unemployment rates into the double digits last year, can’t take anymore uncertainty.
Earlier this week, as the nearing deadline of October 18 made the private conversations with business leaders grow more urgent, Biden delivered his first remarks on the need to raise the debt ceiling, the result of an artificial stalemate that the president called “reckless and dangerous.”
After explaining the concept of raising the debt limit—doing so allows the U.S. Treasury to borrow the money it needs in order to pay for things that Congress has already approved, like raising the limit on a credit card—Biden laid the fault of a potential default on Republicans, who have voted down raising the debt ceiling multiple times in recent weeks, despite statements from Mitch McConnell acknowledging the danger that a default would pose to the global economy.
“Let’s be clear: Not only are Republicans refusing to do their job, they’re threatening to use their power to prevent us from doing our job: saving the economy from a catastrophic event,” Biden said. “I think, quite frankly, it’s hypocritical, dangerous, and disgraceful.”