McConnell: It’s Democrats’ responsibility to suspend debt limits
managing committee Minority Leader Mitch McConnell Rejects Treasury Secretary’s Request Janet Yellen Joining Democrats to raise or suspend debt limits for Republicans before the federal government runs out of cash to pay its bills in October.
“The leader reiterates to Secretary Yellen what he has said publicly since July: This is a unified Democrat government, engaged in a partisan reckless tax and spending spree,” McConnell spokesman Doug Andres said Thursday. “They have to raise the debt limit on their own, and they have the tools to do it.”
Yellen has been insisting for months Congress It will end its so-called extraordinary measures in October to raise the government’s borrowing limit, warned the Treasury Department.
What is the loan limit?
“To avoid the catastrophic economic consequences of the Yellen default, we will continue to speak to Republicans and Democrats about the critical need to rapidly address the debt ceiling in a bipartisan manner,” a Treasury spokesman told Punchbowl News.
credit limit, which reached $22 trillion in August 2019, the legal limit on the total amount of debt that the federal government can borrow on behalf of the public, according to Committee for a Responsible Federal Budget (CRFB). Once the suspension is lifted, the new limit was reinstated to around $28.5 trillion, a figure that includes debt held by the public and the government.
In early August, the Treasury Department began implementing so-called extraordinary measures to ensure that the government could continue paying its obligations for a period of time. But if the debt limit is not raised or suspended, the US government can no longer issue debt and will soon run out of cash on hand.
But Senate Republicans are opposing a move to raise the country’s borrowing limit, with 46 of them pledging to oppose any increase this fall with a vote that would need to pass at least 10 GOP lawmakers. Will be
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“Let’s be clear: With a Democratic President, a Democratic House and a Democratic Senate, Democrats have every tool they need to raise the debt limit. It’s their sole responsibility,” McConnell tweeted on Wednesday. “Republicans will not facilitate another reckless, partisan tax and spending spree.”
Congressional Democrats could use their partisan $3.5 trillion tax and spending bill to raise the debt limit, but they have said they will not. Instead, Democrats are intent on pressuring Republicans to join in suspending the ceiling – given that when former President Donald Trump was in office, there were several bipartisan efforts to do so.
If the US fails to raise or suspend the debt limit, it will eventually have to temporarily default on some of its obligations, which could have serious and negative economic effects. Interest rates are likely to rise, and demand for treasuries will decline; Even the risk of default can lead to an increase in the cost of borrowing.
While the US has never defaulted on its debt before, it came to a close in 2011, when House Republicans refused to pass an increase in the debt limit, prompting ratings agency Standard & Poor’s to lower the US debt rating a notch. inspired to.
The nonpartisan Congressional Budget Office estimated in late July that the government would likely be short of funds to pay its bills in the fall in October or November. The new debt limit, which will include new spending approved by Congress during the past two years, is likely to be around $28 trillion, the CBO said.
Granthshala News’ Jackie Heinrich contributed to this report