WASHINGTON Reuters - The White House warned on Friday that a failure by Congress to expand the debt limit would plunge the economy into recession and could lead to cuts in critical state services.
The government faces an October deadline on the debt limit, after which it may not be able to pay all of its bills without congressional approval.
The president Joe Biden, a Democrat, and his aides have been trying to broker a deal with Republicans to resolve a showdown over raising the $28.5 trillion federal borrowing limit.
The administration is warning lawmakers that the country faces a new financial crisis and a default on its payment obligations.
The White House said in a new fact sheet that economic growth would falter, unemployment will rise and the labor market would lose millions of jobs.
For months, Treasury Secretary Janet Yellen has urged Congress to act, declaring cash and extraordinary measures - used temporarily to fund the U.S. government will run out in October.
Republicans who lost control of the White House in the 2020 presidential election and do not hold the majority in Senate or House of Representatives, have balked and placed the potential crisis on Democrats' shoulders.
It's absolutely unthinkable that we would allow the federal government to default on the obligations it has already made, White House economic adviser Brian Deese told MSNBC on Friday.
We're confident that this will get done.