Speaker of the House Kevin McCarthy (R-CA) was urged not to demand expenditure reductions as a condition of any extension of the nation’s borrowing authority by Senate Majority Leader Chuck Schumer (D-NY).
American debt is repaid. Period. Schumer stated in a statement on Tuesday night that there shouldn’t be any political brinksmanship about the debt ceiling. Speaker McCarthy and the MAGA Republicans should not attempt to use the United States’ full faith and credit as a political negotiating tool.
After Democrats and the Biden administration said they intend to remain firm and won’t let Republicans pressure them to cut federal programs, McCarthy, who agreed to leverage the debt ceiling as a concession to his right flank in order to become speaker, called on Democrats to engage in negotiations with Republicans over a plan to increase the federal debt limit.
McCarthy told reporters on Capitol Hill, “What I would want to do is I would like to meet down with all the leaders and especially the president and start having discussions.”
The House speaker posed a rhetorical question: “Would you keep doing that or would you change the habit if you had a child and you gave them a credit card and they hit the limit and you raised it again, clean increase and again and again?”
Last week, Janet Yellen, the secretary of the Treasury, issued a warning that the US would surpass its borrowing limit of $31.4 trillion on January 19. When the country reaches its borrowing limit, Yellen will be able to prevent a default for a number of months by taking what are known as “extraordinary measures,” such delaying contributions to a federal employee’s retirement account. These choices will eventually run out, and if the country’s borrowing capacity is not raised, it might result in a partial shutdown of the government and a delay in payments to the government, such as Social Security checks.
Republicans’ recent vows to use any vote on extending the debt ceiling to pressure Democrats into budget cuts are reminiscent of a similar showdown in 2011. In exchange for increasing the limit, Congressional Republicans put pressure on then-President Barack Obama to accept budget cutbacks. Fears of a government default shook the financial markets and resulted in a nation’s credit rating receiving an unprecedented reduction.
According to Schumer, a default “would be terrible for working families in America and result in increased expenditures.”
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