Bank of America is preparing for the United States to default on its debt for the first time in history, CEO Brian Moynihan said Monday. The U.S. reached its debt ceiling last month.
Moynihan, who runs one of the largest banks in the country, claimed Bank of America was preparing for a possible financial crisis if lawmakers do not reach an agreement that raises the debt ceiling by June.
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“We have to be prepared for that, not only in this country but in other countries around the world. You hope it doesn’t happen, but hope is not a strategy — so you prepare for it,” Moynihan told CNN anchor Poppy Harlow.
Members of Congress are currently debating on whether to raise the debt ceiling, which would allow the U.S. to pay its necessary debts.
Democrats are pushing to expand the ceiling as fast as possible, and Republicans are attempting to negotiate for major spending cuts. The U.S. will default on its loans if no deal is made.
House Speaker Kevin McCarthy (R-CA) said the national debt is the largest threat to the future of the U.S. during a speech on Capitol Hill Monday. But, he claimed Republicans could not write a “blank check” on America’s future.
“Defaulting on our debt is not an option,” McCarthy said, “but neither is a future of higher taxes, higher interest rates, and an economy that doesn’t work for working Americans.”
Moynihan said although it is a good thing that lawmakers are talking across the political aisle, people need to be prepared for the possibility of a default.
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The U.S. reached its debt limit of $31.4 trillion last month. Treasury Secretary Janet Yellen said she is attempting to use “extraordinary measures” to keep the country afloat, but her efforts will only last until the summer.
Yellen has urged lawmakers to avoid the defaults, claiming that defaulting would cause an economic “catastrophe” for the country.