Top Republican legislators say they’ll use the federal debt ceiling to force President Biden to negotiate if they regain control of Congress, threatening to rekindle high-stakes brinkmanship that might drive the U.S. into default and create big new issues for the White House next year.
Representatives Kevin McCarthy (Calif.), Jim Banks (Ind.), Adrian Smith (Neb.), and Jason T. Smith (Mo.) said they would change federal law to raise the “debt ceiling.” The debt ceiling must be raised next year to pay for spending that Congress and the White House have already agreed to.
Economists fear failing to extend the cap would lead to a catastrophic default that may plunge the U.S. into recession. One research calculated that breaking the barrier might eliminate $15 trillion in wealth and destroy 6 million jobs.
The total national debt is $31 trillion. Congress raised the cap by $2.5 trillion in December, and current predictions show the debt might hit it in 2023. Records show that lawmakers have increased the cap (limit) 78 times since 1960.
The American people expect Congress to fight rising prices with every tool available. They also expect Congress to strengthen our economy, secure our border, bring down the cost of energy, fix our supply chains, and right-size the federal government, said Smith, one of the top candidates for the House Ways and Means Committee. The debt ceiling is one of those tools.
The posture could force senior Biden aides and the president to relive battles with congressional Republicans during the Obama administration, giving a Democratic administration the choice of giving in to conservative demands to cut government spending or jeopardizing the country’s credit. Biden blasted Republican politicians who want to exploit the debt ceiling to slash Social Security and Medicare, accusing them of threatening to “wreck the economy” and refusing to give up.
Biden also ruled out backing Democratic lawmakers’ efforts regarding abolishing the debt limit before the next Congress; if Republicans win the House or Senate in the next two weeks, the global economy could be at stake.
While some Republicans embrace brinkmanship over Medicare and Social Security, officials and experts anticipate the GOP may seek modifications to other Democratic goals.
Conservative policy analysts say that republican leaders have discussed government shutdown and debt limit fights as a way to press for cuts in clean energy spending approved as part of Biden’s Inflation Reduction Act, including former Trump adviser Stephen Moore and anti-tax crusader Grover Norquist. Republicans are also examining calls for the administration to suspend or reverse its plans to ratchet up IRS enforcement of tax rules. Still, the GOP strategy is early and anticipated to alter.
Congress is anticipated to raise the debt ceiling this winter; the exact date depends on when the national debt reaches the maximum. To avoid a shutdown, Congress must finance the government by Dec. 16.
When questioned by Punchbowl News last month, McCarthy left open the prospect of pressing for Medicare and Social Security reforms but then told CNBC he had never addressed such programs.
Trump’s statements on fellow Republicans have strengthened the GOP’s willingness to use the debt ceiling to demand concessions. Trump has accused the Senate GOP leader Mitch McConnell (Ky.) of giving in on the issue in earlier discussions with House Democrats.
The debt ceiling struggle has become a litmus test for GOP leadership positions, such as the open campaign to become the next House whip, where Banks, Emmer, and Ferguson are in the running.
Before McCarthy’s announcement, conservative House Freedom Caucus members considered using the debt ceiling and the December deadline to finance the government for the rest of the fiscal year as reasons to demand spending cutbacks. The freedom caucus, which comprises 30 of the most conservative House Republicans, signaled its intentions last month by pressuring GOP leadership to warn Republicans not to finance the government beyond December without big budget cuts.
No one wants debt default. But questions need to be raised, “What are we spending our money on, and how will we balance it?” Rep. Warren Davidson (R-Ohio) remarked in an interview.
Rep. Bob Good (R-Va.) said a GOP majority would have a mandate from voters to utilize every deadline to slash spending and address the country’s greatest problems, such as increasing prices, immigration, education, and energy independence. We should use the budget process in January to drive the change the American people will vote for on Nov. 8; he said before the House adjourned last month to campaign.
Republicans seem to agree. Adrian Smith, a key Ways and Means Committee Republican, told The Post the debt ceiling is a critical instrument for managing debt and deficit. After two years of reckless spending by Democrats, American households can’t afford to ignore government expenditures.
Spending battles might strain Democrats if they control one chamber of Congress, and the debt issue has already caused splits in the Biden administration.
Treasury Secretary Janet L. Yellen asked for the debt ceiling repeal last year; many economists agree it’s a huge threat with little upside. Friday, Biden said repealing the debt ceiling would be “irresponsible.” Sen. Bernie Sanders (I-Vt.), chairman of the Senate Budget Committee, told CNN on Sunday he opposes eliminating the debt ceiling.
Some Democrats have proposed raising the debt ceiling to googolplex to eradicate it. Reconciliation would allow that move with just Democratic votes, circumventing a GOP filibuster in the Senate. Still, Biden’s opposition appears to have halted those attempts, which would meet opposition from moderate Democrats.
Actively exacerbating inflation while boosting energy and health care prices is selling out middle-class families, White House spokesman Andrew Bates said. To do so would be an economic nightmare for the country.
Biden led Obama administration debt ceiling negotiations with House Republicans, sometimes irritating Democratic allies. Some White House economists want Biden to defuse the debt ceiling bomb immediately, even if it means Democrats must vote to expand the debt limit beyond the next Congress.
Norquist urged Republicans to be tough. If you want a $2 trillion debt limit rise, then we need $2 trillion in deficit reduction, he warned. Norquist said any deficit reduction should come through expenditure cuts, not more taxes, as under Obama. According to him, you can’t argue it’s unprecedented because we did it to Obama, and he succumbed.