The advisers said the standoff between Republicans and Democrats in Congress and the White House has already raised taxpayer borrowing costs through weak Treasury auctions and high yields for short-dated Treasury Bills, while ratings agencies are already publishing analyses of potential U.S. ratings downgrades. They said the Treasury market's role as the backbone of the entire financial system would be called into question, leaving the debt market without a benchmark pricing firm and causing investors to pull back from fixed-income and equity markets. Their letter was distributed after President Joe Biden met with Republican House of Representatives Speaker Kevin McCarthy at the White House with no signs of softening their positions, though they agreed to continue talks. The advisers said that following the banking turmoil that started in March, the debate over raising the debt limit is "reckless and irresponsible." A protracted negotiation would have short-term costs, but a default is an "unthinkable" event, the executives said.

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