Business Roundtable, an association of over 200 chief executive officers (CEOs) of America's leading companies, on Wednesday warned U.S. congressional leaders of the prospect of an economic crisis if they fail to swiftly raise the debt limit.
"Failure to lift the U.S. federal debt limit to meet U.S. obligations would produce an otherwise avoidable crisis and pose unacceptable risk to the nation's economic growth, job creation and financial markets," the letter read.
Doug McMillon, chairman of Business Roundtable and president &CEO of Walmart, and Joshua Bolten, president &CEO of Business Roundtable, were among the writers of the letter to congressional leaders.
"An extended period of uncertainty around the debt ceiling poses an even higher risk than usual as America continues to confront economic risk from the pandemic," the executives wrote.
Moreover, erosion of the country's credit position would also result in "permanently higher borrowing costs" for the federal government and American companies, they warned, urging Congress to raise the debt limit "well before the mid-October deadline."
The warning came after U.S. Treasury Secretary Janet Yellen said last week that the Treasury Department's "extraordinary measures" to temporarily finance the government might be exhausted in October.
"Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history," Yellen said.
As part of a bipartisan budget deal enacted in August 2019, Congress suspended the debt limit through July 31. After the debt limit was reinstated on Aug. 1, U.S. Treasury Department began using "extraordinary measures" to continue to finance the government on a temporary basis.
The debt limit, commonly called the debt ceiling, is the total amount of money that the U.S. government is authorized to borrow to meet its existing legal obligations, including social security and medicare benefits, interest on the national debt, and other payments.
