Biden prepares for debt ceiling showdown



CNN

On Friday, President Joe Biden gave a window into how he is preparing for a looming political showdown over the debt ceiling, saying unequivocally that he will not give in to Republican lawmakers threatening to send the nation into default. ‘He’s not responding to their demands, but adding that he doesn’t support Democrats‘ efforts to abolish the debt ceiling entirely.

In remarks at the White House less than three weeks before the midterm elections, the president touted a $1.4 trillion drop in the federal deficit and discussed what he sees as dire fiscal consequences if the Republicans regain the majority in Congress. The GOP, Biden argued, “will threaten the very foundations of the American economy if we don’t meet their demands.”

“They will crash the economy next year by threatening the full faith and credit of the United States for the first time in our history, putting the United States in default unless we yield to their demand for cut Social Security and Medicare,” he said. “Let me be very clear. I will not give in. I will not cut Social Security. I won’t cut Medicare no matter how hard they work on it.

Biden’s decision to tackle the debt ceiling issue head-on — and quickly draw red lines for any potential negotiations — is raising very real concern among lawmakers about the possibility of Republican majorities. The debt limit has been a threshold that has led to budget battles — and the nation’s credit rating downgrade — for more than a decade, and several House Republicans have made it clear they plan to. use for political gain.

GOP House Leader Kevin McCarthy, likely the next speaker if Republicans win a majority in November, brought the issue to the fore with comments earlier this week that echoed those of several colleagues.

“If people want to do a debt cap (for a longer period of time), like anything else, there comes a time when, okay, we’ll give you more money, but you have to change your current behavior,” he said in an interview with Punchbowl News.

Quietly, there have been preliminary discussions on both sides of Pennsylvania Avenue about how to handle the ticking time bomb equivalent of an increase or suspension of the nation’s borrowing limit. While Congress set the limit to reduce government borrowing, lawmakers have steadily raised it whenever it has been hit.

Biden’s unequivocal response to Republican threats came the same day several House Democrats sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer calling for legislation to “permanently undo the debt limit” during the lame post-election session on Capitol Hill. The letter, led by Pennsylvania Rep. Brendan Boyle, was signed by several prominent House Democrats, including Caucus Chairman Hakeem Jeffries of New York.

Biden said Friday he does not support legislation that would permanently repeal the debt ceiling, a proposal he called “irresponsible.” However, there are other potential avenues to tackle the debt limit in the lame duck session, even if the tight schedule and hectic agenda seem to make any effort very cumbersome.

Biden’s stance on the issue puts him at odds with Treasury Secretary Janet Yellen, who in 2021 expressed support for legislation to abolish the debt ceiling.

“I think it’s become more and more damaging for America to have a debt ceiling,” Yellen told CNN’s “Erin Burnett Out Front” last year. “It has led to a series of politically dangerous conflicts that have Americans and global markets questioning whether or not America is serious about paying its bills. It’s flirting with self-inflicted crisis and it really involves the government giving its treasury secretary and its president conflicting sets of instructions.

Mandates ordering the Treasury to cover expenditures, authorize tax collections and set a requirement that cannot let debt exceed a given limit “may conflict,” she said, adding: “It’s an impossible situation.”

She continued, “Congress needs to debate these issues when it decides to spend on taxation, not every several years, put a screeching halt and say, well, ‘Now we’re not going to let the Treasury Secretary pay the nation’s bills.

About Therese Williams

Check Also

Biden says the United States is back as a leader in the fight against climate change as he urges all nations to step up their ambitions

Sharm el-Sheikh, Egypt CNN — President Joe Biden used a short visit to the United …