US default would harm US military 'readiness and morale', but Biden vows respite

The United States is facing an unprecedented crisis of debt default, but President Joe Biden believes that debt default will be avoided as crucial time passes on a race to find agreement between the White House and Republican negotiators on raising the debt ceiling.

Biden said on Thursday (May 25) that "there will be no default". He added that his negotiations with Republican Speaker Kevin McCarthy had been "productive".

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White House Press Secretary Karine Jean-Pierre also commented on the current situation. Jean-Pierre said, "The team has had productive discussions. Clearly, that means there continues to be a path forward."

Without providing any details about what both parties were working on, Jean-Pierre stated that the most recent round of talks took place on Thursday.

She said, "Both sides will have to understand that neither side is going to get everything that they want."

The US might default if the government does not agree to raise the borrowing limit from its current 31.4 trillion dollars in order to maintain paying the nation's debts.

US Treasury Secretary Janet Yellen reiterated that her department may run out of cash to pay the nation's bills as soon as June 1, she added that she will update Congress shortly about government finances.

WATCH |Treasury Secretary says US won’t be able to pay all bills by June without an increase in the debt ceiling

Despite Biden's affirmation, Democratic minority leader Hakeem Jeffries slammed the Republicans from the House floor, accusing them of having abandoned their jobs in Washington to "risk a dangerous default in a crisis that they've created."

He added, "And these Republicans, they're going to say that Joe Biden refused to sit down with them. That's a fake narrative that they've continued to try to put into the public domain."

House Republicans are demanding up to $130 billion in cuts, with spending next year set at 2022 levels. They also seek stricter employment requirements for assistance recipients and the recoupment of unspent pandemic aid funds.

Meanwhile, Democrats oppose the proposed cuts and want Republicans to agree to a no-strings-attached raise, as they have done dozens of times before.

Harm to military 'readiness, morale'

Top US officer General Mark Milley said Thursday that a US government default would harm the country's military, hitting readiness and morale.

The chairman of the Joint Chiefs of Staff told journalists at the Pentagon that "there would be a very significant negative impact on the readiness, morale and capabilities of United States military if we defaulted" as well as "reputational damage internationally."

"If we defaulted, that would... have significant economic consequences, which would then translate into national security consequences -- paying troops, the morale of troops, weapons systems, contracts, all of that would be impacted," Milley said.

"Readiness clearly would be impacted. So our large-scale exercises that we do at various training centers would probably either slow down or come to a halt in many, many cases," he added.

(With inputs from agencies)

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