Commerce Dept. delivers good economic news ahead of looming financial disaster
On Thursday morning, May 25, President Joe Biden received some good economic news ahead of a looming economic disaster.
The U.S. Commerce Department reported that during 2023's first quarter, economic growth in the United States had been slightly higher than previously estimated: 1.3 percent instead of the 1.1 percent initially reported in April.
CNN notes, "The change was mostly driven by an upward revision to inventory investment, which includes finished goods, materials, or works in progress being saved for a later date."
READ MORE: Janet Yellen sounds the debt ceiling alarm in closed-door meeting with top Wall Street bankers
But May 25 is only a week before Thursday, June 1, the day in which — according to U.S. Treasury Secretary Janet Yellen — the U.S. will begin to default on its debt obligations if some type of budget agreement is not passed. Yellen has been urging Biden and House Speaker Kevin McCarthy (R-California) to work out a budget agreement ASAP, warning that a debt default would be an economic "catastrophe" with far-reaching pain.
McCarthy has agreed to raise the United States' debt ceiling, but only if Biden and other Democrats agree to severe budget cuts. According to Axios reporters Hans Nichols and Juliegrace Brufke, liberal and progressive Democrats in Congress fear that Biden will make too many compromises in order to avoid a default.
"Congressional Democrats are dreading a potential debt default; they are also dreading a potential debt ceiling deal," Nichols and Brufke explain. "What's good for President Biden — and the economy — might not feel so good for congressional Democrats, who are largely in the dark on the deal's specifics and concerned they'll be forced to support a bill that eviscerates programs they have long championed…. If they cut programs too deeply, House progressives — and maybe some Democratic centrists — will vote no."
The reporters continue, "If they don't cut deeply enough, House conservatives will try to blow up the deal."
READ MORE: Watch: House Republican praising McCarthy’s budget proposal confronted with deep cuts his state will face
Rep. Jim McGovern of Massachusetts is among the House Democrats speaking out against the budget cuts Republicans are proposing.
McGovern told Axios, "Let's understand what's going on here. The people that will be adversely impacted are veterans, people who are homeless, people who are just graduating out of foster care, are people with undiagnosed mental illness."
Similarly, McGovern told the Washington Post, "Democrats are not going to vote for a bill that screws poor people, while protecting rich people."
Meanwhile, in the U.S. Senate, Sen. Bernie Sanders (I-Vermont) is among the progressives who believes that the budget cuts Republicans are proposing would be terrible economically. Sanders is urging Biden to "exercise the 14th Amendment" in order to avoid a debt default without caving in to GOP demands.
READ MORE: Bernie Sanders: Biden must 'exercise the 14th Amendment' to 'prevent an economic catastrophe'
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