Biden warns of recession unless Republicans back his debt ceiling plan

© Reuters. FILE PHOTO: U.S. President Joe Biden speaks to reporters in the Roosevelt Room after holding debt limit talks with U.S. House Speaker Kevin McCarthy (R-CA), Senate Republican Leader Mitch McConnell (R-KY) and Democratic congressional leaders at the White

By Nandita Bose

VALHALLA, N.Y. (Reuters) -U.S. President Joe Biden piled pressure on Republican lawmakers on Wednesday to move quickly to raise the country's $31.4 trillion debt ceiling or risk throwing the U.S. economy into a recession that would kill thousands of jobs.

"We've got to fight. We're going to win this fight," Biden said at a flag-bedecked event at Westchester Community College in Valhalla, New York.

Biden made his case in a congressional district that Republicans won by a narrow margin in November, as his aides and staff for congressional leaders met in Washington in a desperate search for common ground ahead of a June 1 deadline.

The Treasury Department says the government will be unable to pay its bills as early as June 1.

Republicans are vowing to support raising the debt ceiling only if Biden agrees to retroactive reductions in government spending. Biden wants the debt ceiling lifted without spending cuts attached, but said he wants to negotiate the next budget.

Biden warned that the post-pandemic economy would be destroyed by a government default, and he listed programs that would be slashed if Republicans get their way, like suicide prevention for veterans.

"This is no time to put all this at risk, to threaten a recession, to undermine America's standing in the world. Republican threats are dangerous and they make no sense," he said.

Biden also said the fossil fuel industry wants the government to eliminate tax credits for individuals and businesses for installing energy-saving devices.

"Here's the real truth: Big Oil doesn't want it, and Republicans are carrying their water," he said.

Biden spoke a day after he met with top Republican and Democratic lawmakers for the first time in three months to try to move forward on the debt ceiling and avoid a historic default.

The White House has dubbed the Republican budget-cutting proposal the "Default on America" act.

White House aides are meeting with congressional leaders' staff in Washington daily before Biden and the leaders meet again on Friday.

The college where Biden spoke is located in a suburban district represented by Republican congressman Mike Lawler, one of a handful of New York Republicans who unseated Democrats in 2022, giving their party its narrow 222-213 House of Representatives majority.

Lawler appeared at the event but did not speak.

Democrats view Republican House members who narrowly won election as possibly vulnerable to being pressured into breaking with their party's leadership and voting for a bill to raise the debt ceiling without conditions.

The president also was attending two fundraising events for his 2024 reelection bid hosted by wealthy donors - former Blackstone (NYSE:BX) executive Tony James and Executive Chairman of the Libra Group George Logothetis.

Tickets for the James gathering will go for $25,000 per person, according to a memo to donors. Biden announced this year that he would appoint James to his intelligence advisory board.

"It can be a pretty ugly campaign coming up," Biden, 80, said at the James fundraiser, where he spoke for more than 30 minutes. "It wasn’t an automatic decision to run again."

Logothetis has regularly donated to the Democratic Party and hosted gatherings in support of former President Barack Obama.

While Biden has largely focused on his presidential duties since announcing his bid for re-election, his campaign operation is coming to life.

The events are expected to generate some $2.5 million for Biden's reelection campaign, according to sources.