Biden attacks Republicans over debt threat

President Joe Biden has cast Republicans as representing the party of “chaos and catastrophe” and sharply criticised their refusal to approve an increase in the US debt ceiling unless they get a deal on spending cuts. 

In an impassioned speech at a steamfitters union hall in Virginia, Biden launched attack after attack on Republicans who control the US House of Representatives, saying some of their proposals are dangerous for the American economy.

House Speaker Kevin McCarthy, a Republican, has vowed not to approve a debt ceiling increase unless Biden and his fellow Democrats reach a negotiated deal with Republicans on cutting future government spending.

“We must finally address Washington’s irresponsible government spending if we want to put America on a better fiscal path,” McCarthy wrote on Thursday.

Biden called McCarthy’s position “mind-boggling”.

“I will not let anyone use the full faith and credit of the United States as a bargaining chip. In the United States of America, we pay our debts,” Biden said.

Of Republicans aligned with former president Donald Trump, Biden said: “They seem intent on being the party of chaos and catastrophe.”

Republicans’ threat is unusual – the US debt ceiling has been increased on a bipartisan basis in Congress for decades, with the exception of a 2011 vote that included spending cuts for several years ahead.

Treasury Secretary Janet Yellen said on January 19 that the United States has reached its $US31.4 trillion ($A44 trillion) borrowing cap, but can continue paying its bills until June by shuffling money between various accounts. 

Investors have warned edging closer to that deadline could have dire market repercussions.

In his first major economic speech of the year, Biden also promoted his record on the US economy, including the creation of more manufacturing jobs, a low unemployment rate and better-than-expected economic growth figures.

Biden reiterated his threat to veto Republican proposals that would limit his authority to tap the strategic petroleum reserve, cut taxes on corporations and levy a national sales tax should they reach his desk.

The economy under Biden has been gripped by inflation that is now ebbing, as are fears that a recession is imminent. 

US gross domestic product grew at a 2.9 per cent annualised rate in last year’s fourth quarter, exceeding expectations, the Commerce Department reported on Thursday.