The looming and potentially catastrophic stalemate affects the maximum amount the US government can borrow to pay its existing bills. According to leading economists and administration officials, Congress must act to raise or suspend that upper limit, known as the debt limit, or risk pushing the United States into a recession with global ramifications.
The nation’s debt — now exceeding $31 trillion — is the result of decades of spending enacted by lawmakers from both parties. But Republicans who took control of the House this month tried to shift the blame squarely to Democrats as they vowed to seek new, sharp cuts in federal spending this year.
“You can’t just raise the debt limit and let President Biden continue to spend as he has,” House Majority Leader Steve Scalise (R-La.) said on Fox News’ “Sunday Morning Futures” Channel.
Appearing on NBC’s “Meet the Press,” Congresswoman Nancy Mays (R.C.) said Republicans need to tackle the debt ceiling because “obviously the budget process is not working.”
“There’s no time like the present because the debt ceiling is looming over us to talk about it,” she said.
Even Sen. Joe Manchin III of West Virginia, a key member of Biden’s party, has signaled interest in spending talks. In a potential break with other Democrats, the core centrist told CNN it would be a “mistake” if the president didn’t discuss some cuts with his GOP colleagues — especially with a focus on eliminating waste, fraud and abuse.
The dispute sets the stage for a high-stakes political battle in the coming months, when the United States is expected to exhaust all of its remaining special budget moves to prevent a government default. In a letter to lawmakers last week, Treasury Secretary Janet L. Yellen said those “emergency measures” could keep the federal finances afloat at least through early June, a timeline that prompted congressional Democrats to issue their own emergency memos on Sunday .
“We shouldn’t be playing with the national debt,” said Senator Richard J. Durbin (D-Ill.) on CNN’s “State of the Union,” adding that Biden “under no circumstances” should negotiate with Republicans.
The US government has never defaulted in its history – and even the mere prospect of default has cost the economy dearly. A similar clash between Republican lawmakers and the Democratic-led White House in 2011 rattled markets, worsened the country’s credit and the cost to taxpayers more than $1 billion. The battle over the brink ended only after President Barack Obama worked out a deal with GOP lawmakers that capped spending for a decade, leading to what Democrats have long described as crippling deficits in federal health, science, education and labor agencies.
Republicans have been pushing for a similar deal under McCarthy this year — but Democrats have remained steadfast in their refusal to accept the GOP’s demands. On Friday, the White House confirmed that for now, Biden plans to sit down with the House speaker to discuss “a number of issues,” including the looming spending battle. But press secretary Karin 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, for his part, has recently highlighted the Republican contribution to the national debt. Speaking Friday at the White House, the president said about a quarter of the U.S. debt over the past 200 years came “in the four years of my predecessor,” referring to former President Donald Trump. And other Democrats pointed to the fact that they cast their votes — unsolicited — to raise the debt ceiling during the Trump administration.
The top moderate Republican, Rep. Brian Fitzpatrick (R-Pa.), said earlier Sunday on “Fox News Sunday” that it would be a “problem” if Biden didn’t engage Republicans in an era of divided government. Co-chair of the bipartisan task force, Fitzpatrick said he is working on legislation to try to address the congestion. He was joined by Congressman Josh Gottheimer (N-NJ), a moderate Democrat, who said the two wanted to put “meat on those bones” of the proposal.
Fitzpatrick said the bill, which is still taking shape, would change the debt ceiling from “a numerical dollar amount” to a measure of debt as a percentage of gross domestic product. If that rate exceeds a certain threshold, a “healing period” will begin, the congressman said, noting that “if that healing does not occur, certain budget reforms automatically begin.”
“Nobody should take the position that we shouldn’t negotiate,” Fitzpatrick said.
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