Top executives from 146 of the largest US companies, including Morgan Stanley, Goldman Sachs, Nasdaq and Pfizer, called on President Joe Biden and Congressional leaders to act quickly to prevent a US default on its debt that could occur as early as June 1. They warned of "potentially catastrophic consequences" if the US defaulted on its debt obligations.
Signatories to the letter include Goldman Sachs CEO David Solomon, Morgan Stanley CEO James Gorman, Nasdaq CEO Adena Friedman, Guggenheim Partners executive chairman Alan Schwartz and Pfizer CEO Albert Burla.
Addressing President Biden, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, Speaker of the House Kevin McCarthy, and House Minority Leader Hakeem Jeffreys, the leaders wrote:
We are writing to highlight the potentially catastrophic consequences of a federal government default. Without a solution, the government will likely run out of money by June 1. Action to end the looming debt crisis is needed now.
“Failure to break the current stalemate could easily lead to more negative consequences,” they continued. “While the US economy is generally strong, high inflation has placed stress on our financial system, including several recent bank failures.”
The executives added: “It would be much worse if the country defaulted on our debt obligations, which would weaken our position in the global financial system. Most of our $31 trillion in debt is held by pension funds, individuals and other governments.” They noted:
Failure to take on new debt would also jeopardize the government's ability to pay its other bills, potentially including some payments to Social Security or Medicare recipients. This cannot be allowed.
“We urge that an agreement be reached as soon as possible so that the country can avert this potentially devastating scenario,” they concluded.
US Treasury Secretary 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 US could default on its debt obligations in the first two weeks of June.
However, President Biden is "confident" that he can reach an agreement with the Republicans on the national debt ceiling. Meanwhile, a group of Democrats in the Senate is reportedly circulating a letter urging him to prepare to invoke the 14th Amendment to unilaterally resolve the standoff over the national debt ceiling.
“I am confident that we will reach an agreement on the budget, and America will not default ... We are going to unite because there is no alternative way to do the right thing for the country. We have to move on,” Biden said on Wednesday.
Former president and 2024 presidential nominee Donald Trump recently urged Republican lawmakers to allow the US to default on its debt unless Democrats agree to spending cuts.
It seems that the owners of large businesses do not understand that default is a necessary measure in the current situation. And Biden stubbornly does whatever the default was.