U.S. President Joe Biden summoned bank and business leaders to White House talks on Wednesday, part of a strategy to pressure Republicans in Congress to vote for a debt ceiling increase.
The White House said leaders of JPMorgan Chase & Co, Intel Corp, Citigroup, Bank of America, Raytheon Technologies Corp, Nasdaq Inc and Deloitte would meet with Biden.
Biden plans to “detail the Republican obstruction that has led us to this point,” according to a memo circulated by the White House. The head of the AARP, a powerful lobby group for older Americans, will detail the impact on social programs for the elderly brought on “by a Republican-created default and the resulting economic catastrophe,” it says.
Republicans want Democrats to raise the debt ceiling using reconciliation, a process that does not require Republican votes; Democrats have refused, saying Republicans should vote to raise the limit, since the debt includes about $8 trillion in spending approved during Republican Donald Trump’s presidency.
A rift over the debt limit has been growing between corporate America and congressional Republicans traditionally aligned on economic issues.
A U.S. debt default would severely hurt the country’s credit rating, plunge the global financial system into turmoil and poses a major risk to company stock prices.
Treasury Secretary Janet Yellen has estimated that a U.S. debt default could occur around Oct. 18 if Congress fails to give the government additional borrowing authority beyond the current statutory limit of $28.4 trillion, which was reimposed after a two-year suspension expired in late July.
A coalition of groups representing investment firms and banks warned congressional leaders in a letter last week that a default would severely hurt financial markets.
“The United States of America defaulting on its obligations is not an option; we are counting on Congress to take the necessary steps to address the debt limit,” wrote Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, the nation’s largest corporate lobbying group has said.
The Chamber spent $82 million on corporate lobbying in 2020, according to OpenSecrets, a research group that tracks political donations. Three-quarters of the Chamber’s campaign contributions went to Republicans in 2020, the group found.
“I didn’t even know the Chamber was around anymore,” U.S. House Republican leader Kevin McCarthy told reporters on Wednesday, when asked about the business group’s position. He said the lobbying group will have no influence if Republicans take the majority in congressional elections next year.