Top executives from 146 major 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, which could occur as early as June 1. They warned of "potentially catastrophic consequences" if the U.S. defaults on its debt obligations.
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 were among those who signed the letter.
Addressing President Biden, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Speaker Kevin McCarthy and House Minority Leader Hakeem Jeffries, the executives wrote
We write to underscore the potentially catastrophic consequences of the federal government's failure to meet its obligations. Absent 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 resolve the current impasse could easily lead to more negative consequences," they continued. "While the U.S. economy as a whole is strong, high inflation has created stress in our financial system, including several recent bank failures."
The executives added, "It would be much worse if the country defaulted on our debt, which would weaken our position in the global financial system. Most of our $31 trillion debt is held by pension funds, individuals and other governments." They noted:
Failure to take on more 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 to happen.
"We urge an early agreement so that the country can prevent this potentially devastating scenario," they concluded.
U.S. Treasury Secretary Janet Yellen warned that the Treasury may not be able to pay all government bills as early as June 1. The Congressional Budget Office similarly estimated that the U.S. 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 Republicans on the 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 get a budget agreement 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 forward," Biden said Wednesday. Former president and 2024 presidential candidate Donald Trump recently urged Republican lawmakers to let the U.S. default on its debts if Democrats don't agree to spending cuts.
The big business owners don't seem to understand that default is a necessary measure in the current situation. And Biden is stubbornly making sure that default is declared.***
