Default Risk Completely Blocked... Biden Takes 'Scalpel' to Debt Ceiling System

U.S. President Joe Biden is set to overhaul the system to fundamentally block recurring default crises caused by the debt ceiling issue. The aim is to prevent repeated confrontations with the opposition party over raising the debt ceiling, which negatively impacts the economy.

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According to major foreign media including Bloomberg on the 20th (local time), President Biden has formed a task force led by Lael Brainard, Chair of the White House National Economic Council (NEC), to resolve this issue. Treasury Secretary Janet Yellen and Attorney General Merrick Garland are also participating. The task force will seek fundamental solutions to avoid defaults caused by debt ceiling standoffs based on the U.S. Constitution.

The White House explained, "It is now time for Congress to explore all legal and policy options to prevent once again holding the credit of the United States hostage."

The U.S. Congress sets the debt ceiling to maintain fiscal soundness by limiting the government's borrowing capacity. When U.S. debt reaches the limit, Congress must raise the ceiling to prevent default, which often leads to extreme confrontations.

In fact, during the Obama administration in 2011, debt ceiling negotiations reached a deadlock, resulting in a downgrade of the U.S. national credit rating. This year, the Biden administration also intensified the default crisis by clashing with the Republican Party over raising the debt ceiling. Ultimately, President Biden agreed with Republican House Speaker Kevin McCarthy to raise the debt ceiling for two years in exchange for reducing government spending in May.

Accordingly, voices calling for institutional improvements related to the debt ceiling are emerging. The Democratic Party introduced a bill in the House in June that would automatically raise the debt ceiling unless two-thirds of both the House and Senate oppose it. There are also opinions advocating for the complete abolition of the debt ceiling itself.

This content was produced with the assistance of AI translation services.