National Economic Council Director Lael Brainard participated in an interview on “Face the Nation” on May 14, 2023. The host, Margaret Brennan, asked about negotiations on the debt ceiling. Brainard stated that discussions were serious and constructive. However, the biggest fear of business leaders and CEOs was that Congress would be unable to prevent a default. Brainard emphasized the importance of ensuring that Congress fulfills its responsibility to avoid defaults.
Brennan asked if raising the debt ceiling in the short term was the only option. Brainard stated that conversations about the budget were also taking place. Congress knows how to avoid defaults, and their actions are necessary to ensure the US can meet its financial commitments. Brainard noted that the goal was still to reach an agreement before June 1.
Brennan mentioned JPMorgan Chase & Co. Chief Executive Jamie Dimon’s contingency plans and asked if negotiations should have started sooner. Brainard stated that it was the responsibility of Congress, and they have always acted in a timely manner to avoid defaults.
Brennan asked about the health of the American banking system. Brainard noted that there were approximately 5,000 banks in the system and that banking regulators have taken strong action to address bank failures. Brainard stated that the banking system was healthy and worthy of continued vigilance.
Overall, Brainard emphasized the importance of ensuring that Congress avoids defaults and pays bills. She noted that business leaders and CEOs are concerned about the impact of a default on borrowing costs for small businesses and the US government. Brainard also emphasized the health of the American banking system but noted that banking regulators are closely monitoring the situation.