Republican former President Donald Trump on Wednesday played down the severity of a potential U.S. government default, saying the consequences of a failure by Congress to raise the nation's debt limit "could be maybe nothing."
Most economists warn that a failure to raise the debt ceiling by June 1, when the U.S. Treasury says the government will start to run out of money to meet its obligations, will trigger a catastrophic economic recession with the loss of millions of jobs.
Democratic President Joe Biden and Republicans who control the House of Representatives are negotiating raising the debt limit, which is a mechanism to allow the government to pay obligations Congress has already incurred, such as payments on foreign debt and monthly Social Security checks.
Republicans are insisting on massive spending cuts before they agree to pass a debt ceiling increase. Biden so far is insisting on a "clean" measure without conditions.
Economists say threats by some Republicans not to raise the debt ceiling by June 1 is a dangerous game of Russian roulette with the U.S. and global economy, as a failure to raise it will trigger the first U.S. default in the country's history.
The debt limit was raised three times without a fight during Trump's four years as president, a period when the national debt also exploded because of his tax cuts.
