The emerging and potentially catastrophic gridlock concerns the maximum amount the U.S. government can borrow to pay its existing bills. Leading economists and government officials say Congress must act to raise or suspend that ceiling, the so-called debt limit, or risk pushing the United States into a recession with global implications.
The country’s debt — now more than $31 trillion — is the result of decades of spending set by lawmakers in both parties. But the Republicans, who took control of the House this month, have tried to place the blame squarely on the Democrats as they vow to pursue new, big cuts in federal spending this year.
“You can’t just raise the debt limit and let President Biden spend the way he has,” Steve Scalise (R-La.), Majority Leader in the House, told Fox News Sunday.
Appearing on NBC’s “Meet the Press,” Representative Nancy Mace (RS.C.) said Republicans should seize the debt ceiling because “the budget process is clearly not working.”
“There’s no time like the present, because we’re looming over the debt ceiling, to talk about this,” she said.
Even Senator Joe Manchin III of West Virginia, a key member of Biden’s party, expressed interest in conducting spending talks. In a possible break with other Democrats, the central centrist told CNN it would be a “mistake” for the president not to discuss some of the cuts with his GOP counterparts — particularly those aimed at eliminating waste, fraud and abuse.
The row paves the way for a high-stakes political battle in the coming months, when the United States is expected to exhaust all of its remaining fiscal special measures to avoid government default. In a letter to lawmakers last week, Treasury Secretary Janet L. Yellen said these “extraordinary measures” could bolster federal finances through at least early June, a timeline that prompted Democrats in Congress to issue their own urgent memos for action on Sunday. to be heard.
“We shouldn’t play games with the national debt,” Sen. Richard J. Durbin (D-Ill.) said on CNN’s “State of the Union,” adding that Biden should “absolutely not” negotiate with Republicans.
The US government has never defaulted in its history – and even the prospect of bankruptcy has cost the economy dearly. A similar confrontation between Republican lawmakers and a Democrat-led White House in 2011 rocked markets, worsened the nation’s credit and cost taxpayers more than $1 billion. The crisis ended only after President Barack Obama struck a deal with GOP lawmakers that capped spending for a decade, leading to what Democrats have long described as crippling shortcomings in federal health, science, education and employment agencies.
This year, Republicans are pushing for a similar deal under McCarthy — but Democrats have remained steadfast in their refusal to accept GOP demands. On Friday, the White House confirmed that Biden plans to now sit down with the House speaker to discuss “a range of issues,” including the looming spending battle. But press secretary Karine Jean-Pierre also stressed in a statement that “raising the debt ceiling is not a negotiation,” citing the prospect of “economic chaos” if Republicans seek to impose the upcoming fiscal deadline for political gain.
Biden aides want to force GOP to abandon debt cap threats
Biden, for his part, has recently emphasized Republicans’ contributions to the national debt. The president said at the White House on Friday that about a quarter of US debt over the past 200 years came “in the four years of my predecessor,” referring to former President Donald Trump. And other Democrats have pointed to the fact that they voted — without demands — to raise the debt ceiling during the Trump administration.
A moderate Republican, Representative Brian Fitzpatrick (R-Pa.), said on another Fox broadcast earlier Sunday that it would be a “problem” if Biden didn’t engage Republicans in an era of divided government. Fitzpatrick, co-chair of the bipartisan Problem Solvers Caucus, said he is working on legislation to try to address the impasse. He was joined by Rep. Josh Gottheimer (NJ), a moderate Democrat, and said the two want to drop “meat on those bones” from that proposal.
Fitzpatrick said the still-formulating bill would change the debt ceiling from a “numeric dollar amount” to a measure of debt as a percentage of gross domestic product. If that rate crosses a certain threshold, a “healing period” would begin, the congressman said, noting that “if that healing doesn’t happen, certain fiscal reforms will kick in automatically.”
“Nobody should take the position that we shouldn’t negotiate,” Fitzpatrick said.