Karine Jean-Pierre warns House Republicans pose a major threat to the economy.

White House Press Secretary Warns of Economic Threat from House Republicans

Debt Ceiling Increase and Spending Reforms

White House Press Secretary Karine Jean-Pierre has issued a warning that House Republicans’ efforts to combine a debt ceiling increase with meaningful spending reforms currently pose the “single biggest threat” to the US economy. This comes after President Joe Biden met with senior Democratic and Republican lawmakers to negotiate an increase in the debt ceiling, a policy established by Congress to prevent the federal government from spending beyond a predetermined national debt limit. Jean-Pierre contends that Biden will not accept attempts to take the full faith and credit of the United States hostage in order to enact an extreme agenda.

Threat to the Economy

“The single biggest threat to our economy would be if House Republicans fail to prevent default,” Jean-Pierre said in a statement. “That would cost millions of Americans their jobs, increase costs, increase the deficit, and crater retirement accounts.” Other senior administration officials have made similar assertions in recent days, including Treasury Secretary Janet Yellen, who cautioned that the federal government would default unless the debt ceiling is raised by the first day of June.

Impact of Debt Default

A debt default would indeed cause a recession should the US federal government fail to repay obligations. The national debt, which exceeded the $31.4 trillion debt limit this year to reach $31.7 trillion, is a source of persistent financial risk and a damper on economic growth.

Decreasing Inflation

Jean-Pierre issued the statement to take credit for the Biden administration’s purported efforts to decrease inflation, which increased 4.9% year-over-year as of last month, according to data from the Bureau of Labor Statistics released on Wednesday. She noted that price levels have decreased substantially “since last summer” even as inflation remains between three times and four times higher than rates seen at the start of the administration.

Lowering Costs for Families

“Prices at the grocery store have actually come down the last two months, providing some welcome breathing room for families,” she continued. “While we have more work to do to lower costs for families, the President’s Inflation Reduction Act is already working to lower the cost of prescription drugs, health care, and home energy costs.”

Impact on Household Budgets

Real average weekly earnings, which consider the impact of inflationary pressures on wages, meanwhile witnessed a 1.1% year-over-year decline, thereby constraining household budgets and decreasing purchasing power, according to more data from the Bureau of Labor Statistics. Jean-Pierre nevertheless claimed that the Biden administration is “creating good jobs you can raise a family on in communities throughout the country.”

Americans’ Financial Outlook

Americans are more pessimistic about their finances than at any time since the Great Recession, with 50% of respondents in a February survey from Gallup saying they are “financially worse off” compared to one year ago. Low-income Americans were the most likely to say they are worse off since last year.