Top banking executives emerged from a meeting with President Obama Wednesday warning of the "extremely adverse" consequences of a national default.
Goldman Sachs CEO Lloyd Blankfein said there is broad agreement in the banking industry that the debt ceiling shouldn’t be used as a “cudgel” in policy fights on Capitol Hill.
"We'd like to see the fight not be on this ground," Blankfein said after the hour-long meeting between Obama and members of the Financial Services Forum.
“You can litigate these policy issues; you can relitigate these policy issues in a public forum, but they shouldn't use the threat of causing the U.S. to fail on its obligation to repay debt as a cudgel," he said.
"There's a consensus that we shouldn't do anything to hurt this recovery.”
The Financial Services Forum includes 20 CEOs from the nation's largest banking institutions, many of whom were on hand for the talk with Obama. Attendees included Jamie Dimon of JPMorgan, James Gorman of Morgan Stanley, Brian Moynihan of Bank of America and John Stumpf of Wells Fargo.
Moynihan said that the point of the meeting was to "make it clear that people understood the seriousness of the situation."
The White House, meanwhile, billed the meeting as an opportunity to rally the business community to pressure congressional Republicans to strike a deal on the debt ceiling.
The Treasury Department has set at deadline of Oct. 17 for Congress to raise the $16.7 trillion borrowing limit. If lawmakers are unable to pass an increase before then, the United States could default on debt payments for the first time in history.
White House press secretary Jay Carney said Tuesday the business leaders were wary after "what the consequences were of the mere flirtation with default that Republicans engaged in 2011."
"It was a setback to all kinds of businesses, and it was a setback to middle-class families," he said. "Doing it over again, and going even further and actually defaulting, if that's what the Republicans decide to do, would have even more catastrophic consequences."
Industry groups have made it clear that they are worried the government shutdown is creating a toxic atmosphere that could make it harder for Congress to approve a debt-ceiling increase.
Obama has repeatedly said he won’t negotiate over the debt ceiling, but House Republicans plan to seek concessions in return for an increase.
That dynamic puts business leaders in an awkward spot, as they publicly support a “clean” debt increase but are leery of being seen as helping the president.
Asked if they planned to take their message to Republicans on Capitol Hill, the banking executives said they did not want to make the debt ceiling a partisan issue.
But they also said they would also be discussing their concerns with GOP leaders.
"There's no precedent for default," Blankfein said.