President Biden hosts meeting with business leaders and CEOs on debt limit
well we know that only one thank you yes oh god hello folks i want to thank uh you can take these off while we're speaking i want to thank our participants that are here as well as those on zoom and uh this is uh to uh state the obvious uh an important get-together here uh i'm gonna make uh some brief comments maybe ask a few questions and then we'll yield and go down the road here and maybe we can uh all of us both uh uh virtually as well as in person here we can hopefully make some progress i want to thank the secretary of treasury secretary yellen commerce secretary mondo i see her on the screen there it's good to see you and the leaders of some of america's most important businesses and institutions the american association of retired persons the aarp bank of america citibank deloitte intel jp morgan nasdaq the national association of realtors and raython and uh for joining me today to talk about the need to raise the debt limit we haven't failed to do that since our inception as a country we need to act these leaders know the need to act the united states pays his bills it's who we are it's who we've been and so we're going to continue to be god willing that's what's called the full faith and credit the united states let me be clear raising the debt limit is paying our old debts there's nothing to do with new spending or what may be coming this year or other years there's nothing to do with my plans on infrastructure or building back better both of which are paid for but they're not even in the queue right now it's about paying for what we owe and preventing a catastrophic event occurring in our economy i'm glad these leaders are here to talk about the real world impact this is going to have on people and on our position in the world today's discussion won't be partisan it shouldn't be raising the debt limit is usually bipartisan let me speak for myself here i want to be clear so the american people understand what's going on there's a senate vote today to raise the debt limit traditionally it needs only 50 votes i was we were informed by our republican friends that they had to be all democrat votes they weren't going to help i said okay we'll provide 50 votes the definition and the democrats we have the votes the democrats are willing to step up and stop this economic catastrophe if senate republicans will just get out of the way but our senate republican friends are planning to block the vote to raise the demand the debt limit by using a procedural power called the filibuster to say that in plain english it means you have to have 60 votes and when there's a filibuster 60 votes a super majority instead of 50 to get anything done it's not right and it's dangerous the reason we have to raise the debt limit is in part because of the policies of previous administration which incurred nearly 8 trillion in bills in four years some of which democrats voted for more than a quarter of all the debt now outstanding we had to raise the debt limit three times when donald trump was president and the republicans moved to raise it each time and each time the democrats supported the effort to raise the debt but now republicans won't raise the debt limit despite being responsible for what the debt limit why it has to be raised for the bills that are outstanding won't raise it enough through if they've done we're going to be defaulting on a debt that would lead to self-inflicted wounds that risk the market tanking and wiping out retirement savings and costing jobs the faulting on the dead which secretary yellen said could happen at any day after october the 18th as we run out of money means that social security benefits will stop salaries the service members will stop benefits to veterans will stop and much more the failure to raise a debt limit will undermine the safety of the united states treasury securities threaten the reserve status of the dollar as the world currency and the world relies on downgrade america's credit rating and result in a rise in interest rates for families talking about mortgages auto loans credit cards my friends and there are many of my friends the senate republicans position i find to be not only hypocritical but dangerous and a bit disgraceful especially as we're crawling our way out of a pandemic that cost america 700 000 lives thus far and we're still battling it our markets are rattled america's savings are on the line the american people your savings your pocketbook are directly impacted by this stunt it doesn't have to be this way my republican friends need to stop playing russian roulette with the u.s economy if they don't want to do the job just get out of the way we'll take the heat we'll do it we will do it let us do it let the democrats vote to raise the debt limit without obstruction or any further delays house democrats have already passed the bill that would do that raise the debt limit and keep the government functioning it's sitting in the united states senate right now for democrats with no help from republicans have the votes today to pass the debt limit the path republicans offer would take us right to the brink and cause irreparable economic damage in my view so let's vote and end this mess today that's the only way to eliminate the uncertainty and risk that will remain for american families and our economy if we don't over more than 200 years america has built this hard-earned reputation of the strongest safest and most secure investment in the world that's why the united states is the financial rock the world looks to and trusts now in one cynical destructive partisan ploy just for politics republican friends are teetering on the brink here they're threatening to boot that all away now it's a meteor headed to crash into our economy we should all want to stop it stop it immediately this shouldn't be partisan and i'm thankful for the leaders who share the urgency on why uh why we need to act we need to act now many more here with me not not not next week now look forward to hearing from their their perspectives and and will now get uh get this meeting started with uh my colleague's permission i'd like to start off if i may with a question for uh jane fraser the ceo of city by the way congratulations on your award uh you run one of the largest banks in america and what impacts uh are you seeing or do you think you'll see from this obstruction what does it mean for the small businesses and everyday people if we renege on the debt here yeah thank you mr president for inviting us all to talk about this critical issue um as the head of the bank i don't have insight on what the right legislative solution is but i can tell you that from an economic perspective we need to resolve this issue very quickly every day of delay right now comes at an increasing price as we've begun to see in the markets already starting last friday america simply cannot default on the debt because the u.s treasury market is the bedrock of our financial system domestically and globally and defaulting is going to cause lasting damage to the credibility of the united states with investors and in financial markets around the world but as you say the ramifications are not limited to the markets it's already beginning to cause some damage in the economy it will hurt consumers it will hurt small businesses and it's not an exaggeration to say that even small distortions in the treasury market can cost taxpayers tens of billions of dollars over many years consumers can be burdened with higher borrowing costs very quickly whether they're putting something on a credit card or they're getting a mortgage and for small businesses trying to recover from the pandemic um this comes at a very critical time so we just can't wait to the last minute to resolve this we are simply put playing with fire right now and our country has suffered so greatly over the last two years the human and in the economic cost of the pandemic has been wrenching and we don't need a catastrophe of our own making to undermine the progress that is underway so we really urge the administration and congress to do what's necessary to resolve the situation for the good of our economy for the good of our country thank you mr president thank you and you make a very good point uh that we're uh god willing i think we're just about to begin to turn the corner again on the pandemic an awful lot of small businesses tens of thousands of them have acquired significant debt we provide a significant relief as well but it's just just an incredibly complicating feature i'd like now for with her permission i'd like to ask uh uh adina friedman the ceo of nasdaq whether she'd be willing to give us her thoughts and thank you for taking the time ms friedman for to talk to us well mr president thank you very much for the opportunity to address the current situation we are starting to experience elevated volatility in the markets which can be partially attributed to the uncertainty that's been introduced by the delay and improving the extension of debt limit we would expect that a continued delay in extending the debt limit would further destabilize the markets and when we consider the broader economic cost of the uncertainty and certainly a possible default we would as jane mentioned see higher borrowing costs for consumers and small businesses as well as delays um and much needed payments to uh to major social programs such as social security medicare so when we look at this these delays and certainly a default would mean that hard-working americans will ultimately bear the burden so as you mentioned the extending the debt limit simply allows the payment of obligations that have already been made by the us government therefore voting to extend the debt limit is an important bipartisan action to reinforce the full faith and credit of the united states and we urge that we urge action as quickly as possible so thank you so thank you let me ask you the uh devcon 10 question if we don't if if we if we default even for a day or two what do you think the impact on the market will be i think that we would expect that and investors really just don't handle uncertainty well um and i think that investors and and certainly and as we know there are hundreds of millions of investors that are involved in the markets today that have put their hard working their hard hard earned savings into the markets and we would expect that the markets will react very very negatively if the if we actually get to a point of a defcon 10 type of situation with the default what does that do to uh people's uh retirement accounts yeah i i think we have to realize that well over half of the uh adult americans have money in the stock market either directly or indirectly and so those savings accounts there's retirement accounts the pensions they'll all experience a significant sharp drop in their values which of course makes them feel less certain about their ability to to manage their lives and their savings and plan for retirement well thank you i don't mean thank you for the result but thank you for explaining to people who are watching us how consequential this is you know uh uh i see all buddy jamie dimon up there jp morgan jamie excuse me for calling you jamie mr uh ceo um uh it's good to see you uh why from your perspective do we need to raise the debt limit immediately before october 18th mr president thank you can call me jamie that's fine and uh appreciate you having us all here mr president um anyway there are five quick points i want to make number one is really a morality point we all teach our children that we're supposed to meet our obligations i i don't think the nations be any different number two we should never even get this close there are huge economic costs already being born by companies and lawyers trying to figure out what this means if something like this ever happens it's already affecting the stock market et cetera as you've heard from some of the folks here number three we should get rid of the debt ceiling uh we don't need to have this kind of breakmanship every couple years uh number four an actual default an actual default would be unprecedented we the things we know that it would do are very bad and it could be potentially far worse the effects would be cascading so day one would be bad but the cascading effects and the ensuing weeks could go anywhere from a recession to a complete catastrophe for the global economy and i don't know why anyone would take a chance like that uh and number five uh america's role in the world is essential we are the bedrock the american treasury is the bedrock um our credibility we're being watched right now by our allies and unfortunately our enemies our credibility is absolutely essential trust in america and the us dollar and the financial system is critical to the world economy and eventually actually world peace so this is a time i think we should show american competence not american incompetence well i'm glad you raised that last point because uh when i got back from the g7 and subsequently with a number of virtual meetings with my colleagues and heads of state um i know brian moynihan knows about this as well we are not only being measured in terms of our strength and our reliability based upon the size of our military and or the physical strength that we possess but it's on whether or not we can function there's a great debate going on and i'm not exaggerating this all of you deal internationally there's a great debate going on whether or not in the 21st century in the second quarter of the 21st century can democracies function with things moving so rapidly and i can tell you a couple of the folks i've had a lot of spent a lot of time with uh of late mr putin and mr xi jinping they really believe that uh autocracies are the only way forward because they can act quickly and decisively it's not a joke and we're seeing effects of this around the world and i don't know it's it's i don't know it's understandable why the average american wouldn't understand what the consequences of this will be for american security and the willingness of other countries to follow our lead we've always led the world not just by the example of our power but the power of our example and that's going to be called in a severe question i mean for real for real and has consequences that are con real what does you know jamie what what does further delay mean for a company like yours and the family you serve if we just even if we just go on right up to the brink may we start on monday we're gonna start reviewing all our contracts repo cloud requirements uh there will be huge demands of people selling treasuries wanting financing to treasuries uh interest rates will start going up it'll get worse as we get close to the brink and as you said it'll hurt not big companies and we don't don't worry about that we do worry about that it hurts the average american and we don't want that well i uh i thank we're going to get to everybody but i'm going to yield to uh the director of public engagement former chairman of the black caucus in congress cedric richmond cedric thank you mr president i'll just quickly uh yield to who uh your great uh treasury secretary who is an expert on this for comments on uh what she thinks the ramifications are and where we're headed so with that secretary yellen thank you cedric thank you mr president and let me thank the business and community leaders who have joined us here today i wish we could be meeting to discuss another topic finding solutions to climate change or how to better invest in the future of our economy but the urgency of the debt limit situation demands immediate attention and i want to be clear about my position first this is an urgent matter it must be resolved immediately treasury will exhaust its extraordinary measures if congress has not acted to raise or suspend the debt limit by october 18th after that point we expect treasury would be left with very limited cash that would be depleted quickly and as we've seen in the past and as this group knows even delaying action can cause harm to business and consumer confidence raise borrowing costs disrupt financial markets and cause a downgrade of the u.s credit rating second let me be clear this would be a catastrophic outcome in this catastrophe would occur on two dimensions the first relates to the financial system and macro economy if congress does not take action to raise the debt limit treasury's cash balance will reach an insufficient level to pay the nation's bills and america would default for the first time in history and default will call into question the full faith and credit of the united states our country would likely face a financial crisis causing interest rates to rise quickly and restricting access to credit our fragile recovery would be thrown into reverse we would likely experience a recession millions of jobs would be lost and the pain would endure well past the resolution of the crisis the second catastrophe would be borne by all the americans who directly receive any sort of payment from the federal government every social security beneficiary every family receiving a child tax credit every military family waiting for a paycheck or small business owners receiving a federal loan they're all at risk millions are without sufficient savings to forego an expected check and for these households and businesses the impact would be devastating to take one heartbreaking example millions of seniors who depend on social security for their support would have to make awful choices such as deciding whether to pay rent or buy groceries and the same goes for parents of young kids expecting a child tax payment hopefully it goes without saying this is not only bad for people it's equally devastating for american companies for decades our country has earned a reputation for being a welcoming and a reliable place to do business we respect the rule of law we honor our debts and this reputation has benefited us in many ways including the ability to keep interest rates low and for the dollar to service the world's reserve currency ultimately these benefits have helped us lead in the world economy and become a more prosperous nation and yet today we are staring into a catastrophe in which we surrender this hard-earned reputation and force the american people and american industry to accept all the pain the turmoil and the hardship that comes with default it's unnecessary and it must be avoided at all costs congress must address the debt limit immediately thanks i look forward to continued conversation thank you secretary uh yellen and mr president uh as we heard earlier uh from jane about half of adults have money in the stock market either directly or indirectly and we know that 50 million people rely on their social security checks to make ends meet so i'd now like to turn it over to joanne jenkins so thank you mr president for the opportunity to speak to the impact of not raising the debt ceiling on our members in particular and then nearly 65 million people across this country who rely on social security you
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