Lawmakers are playing high-stakes chicken as debt ceiling deadline approaches | Politics
In rare agreement, Democrats and Republicans on Capitol Hill, along with President Joe Biden’s administration, are warning the nation is heading towards economic catastrophe if the debt ceiling is not lifted to prevent the government from doing default on his invoices.
And a few weeks before that day’s arrival, lawmakers remain engaged in a high-stakes political game over who should take responsibility for paying the debts contracted by both parties.
During the month of October, the government is expected to hit the “debt ceiling”, which means it no longer has the power to borrow the money it needs to pay its bills. The debt is due to legislation and financial decisions already made, including the $ 2 trillion tax cut former President Donald Trump passed, as well as massive coronavirus relief plans approved under the Trump and Biden presidencies.
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But while lawmakers on both sides of the aisle were eager to take credit for one or more of these elements, they were less thrilled to be the only party to officially acknowledge that the measures were costing money. .
It means raising or suspending the debt ceiling, which was once a bipartisan, pro forma decision. Republicans repeatedly voted to raise the debt ceiling when Trump was president.
But Republicans on Capitol Hill insist that Democrats act only with Democratic votes, arguing that since Democrats hold a (narrow) majority in Congress, they don’t need any GOP support.
“The Democrats don’t need our help. They had all the tools to tackle the debt limit on their own – the same party-line process they used to cut inflationary spending in March. and are already planning to use again this fall, “said the Senate Minority Leader. Kentucky Republican Mitch McConnell told the Senate.
This claim is true, but only if Senate Democrats use a piece of legislation called “budget reconciliation” to raise the debt ceiling. This measure cannot be obstructed, so technically the Democrats, with the decisive vote of Vice President Kamala Harris, could solve the problem on their own.
This would allow Republicans to claim – somewhat spuriously – that it was the Democrats who put the nation in more debt. In fact, the suspension of the debt ceiling allows the payment of bills already incurred, including several trillions of dollars in debt incurred under the Trump administration.
House Democrats refused to blink and prepared Tuesday to pass an increase in the debt ceiling, attached to a spending bill that keeps the government in office after the current fiscal year ends on September 30. If the spending measure – called the “continuing resolution” – is not passed by the end of the month, the government will close its doors. The spending measure also includes some important items for Republicans, such as helping hurricane-affected states.
“We are not going to let them get away with this,” Representative Hakeem Jeffries, a New Yorker who is chairman of the House Democratic Caucus, told reporters on Tuesday. “Right now, the House has a responsibility to act, and we will. And then it will be the responsibility of the Senate to act.”
The two sides are banking on the other side to avoid a government shutdown – still politically unpopular – or a very first government default on its loans.
“The economic scenario is cataclysmic,” the report said, forecasting a 4% drop in gross domestic product, nearly 6 million jobs lost and an unemployment rate of nearly 9%, particularly painful after the country collapsed. out of unemployment in the era of the pandemic. . Stock prices would be cut by nearly a third at the worst of an expected sell-off, the report said, wiping out $ 15 trillion in household wealth.
Closer to national budgets, the report says the inevitable budget cut would mean that $ 80 billion in payments due Nov. 1 to Social Security recipients, veterans and active-duty military would be delayed by two weeks.
During Tuesday’s ground floor debate on all spending and debt, many Republicans shrugged off the issue entirely and spoke about border security, an issue they say will help GOP candidates in the election. midterm next year.
If the Senate does not approve of the measure that keeps government open and allows it to pay American debts, Democrats are sure to view the GOP as fiscal reckless and architects of potential economic disaster. This means Congress – with an apocalyptic clock behind it – will have less time to avert the disaster that Congress says is looming.
“My friends know it won’t work” to pass the debt ceiling by tying it to the spending bill, Rep. Tom Cole, Republican of Oklahoma, said during the floor debate, referring to his fellow Democrats. “But yet, we are going to send him back to the Senate, where the support is not there.” Hopefully, Cole added, the two sides could reunite in time.