United States President Joe Biden has warned the economy could enter a recession and shed millions of jobs unless Republicans agree to raise the country’s $31.4 trillion debt ceiling before a fast-approaching deadline.

In a campaign-style speech in a swing district in New York state on Wednesday, Biden accused Republicans of holding the economy hostage by demanding “devastating” spending cuts in exchange for raising the debt limit.

“We’re bringing jobs back all across America,” Biden said at an event in Valhalla, New York, which is home to a congressional district that Republicans narrowly won in mid-term elections in November.

“This is no time to put all this at risk, to threaten a recession, to put at risk millions of jobs, to undermine America’s standing in the world.”

The Biden administration and congressional Republicans have struggled to find common ground on raising or suspending the debt ceiling in order to prevent the US from defaulting on its debt within weeks.

The US treasury department has indicated it may be unable to pay its bills as soon as June 1.

Republicans have insisted they will only support raising the debt limit if Biden agrees to retroactive spending cuts, while the president wants to negotiate the budget separately.

In April, House Republicans passed a plan seeking $4.5 trillion in deficit savings by cutting spending, scrapping tax breaks for clean energy, and reversing Biden’s plan to forgive student debt.

Biden and congressional leaders are to meet on Friday to discuss how to avert an impending default crisis after failing to reach a breakthrough earlier in the week.

Last week, White House economists estimated that a protracted default could cost up to 8 million jobs and wipe half the value off of the US stock market.

Mitch McConnell, the top Republican in the Senate, earlier this week assured that Congress would not let a default happen, telling reporters: “The United States of America is not going to default.” (Al Jazeera)

•PHOTO: US President Joe Biden has warned the US could tip into recession if Republicans do not agree to raise the debt ceiling [File: Evan Vucci/AP]

Update news