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Biden accuses Republicans of urging Congress to raise debt limits this week

US President Joe Biden speaks on October 4, 2021 from the White House State Cafeteria in Washington, DC, about US debt caps.

Jonathan Ernst | Reuters

President Joe Biden On Monday, it accused the Republicans of raising or suspending US borrowing limits and blocking efforts to avoid the dangerous first-ever default of government bonds.

The president accused the Republicans of what he described as hypocritical behavior. He added about $ 8 trillion to US debt during the Trump administration and refused to pay tax cuts and spending that were already approved later.

Biden said Republican leaders abandoned the filibuster and rejected Whitehouse’s request to allow Democrats to pass a bill that would raise the cap with a simple majority rather than a 60-vote margin.

The plan would theoretically reduce Republican senators’ approval of a cap increase while avoiding Democrats setting borrowing limits on settlement bills aimed at reviewing the U.S. social safety net. will do.

Republicans “do not vote to increase debt to cover their spending,” Biden said from the White House. “Not only are Republicans refusing to do their jobs, they are threatening to use their power to prevent us from doing our jobs: from catastrophic events. Save the economy. “

“Frankly, I think it’s hypocritical, dangerous, and shameful,” he added. “Don’t get in the way”

Senate Republican leader Mitch McConnell’s office did not immediately respond to CNBC’s request for comment on Biden’s remarks.

Treasury last week, lawmakers Address debt caps by October 18The so-called “drop dead” date, which authorities estimate the United States will make urgent efforts to respect the payment of its bonds.

Economists can only speculate on the economic impact of unprecedented US defaults, but many, including the Treasury Secretary, Janet Yellen — Say it’s “catastrophic.”

Yellen said Democratic Congressman Nancy Pelosi could lose confidence in Washington’s ability to achieve IOUs in time, causing interest rates in the economy as a whole to skyrocket and undermine the dollar’s role as a global reserve currency. I emphasized that there is. Send a shock wave through the financial markets.

Politicians from both parties admit that if they don’t raise their debt caps, they must risk economic disasters. Republicans and Democrats disagree on how to push the boundaries, and each is trying to use this issue as a political club.

Republicans are dissatisfied with what they see as a Democratic reckless spending plan, with Pelosi and Senate leader Chuck Schumer, DN.Y. States that broad social policy and climate bills should include a cap suspension.

Democrats are using a special process called budget adjustment to pass trillions of dollars in expanding and creating education, health care, climate, and other programs. The settlement allows the parties to pass the bill in the Senate with a simple majority against the usual 60-vote requirement.

Republican McConnell has revealed that members of the caucuses do not support efforts to raise the cap, arguing that Democrats who control Congress and the White House are responsible.

Minority leaders emphasized their commitment in a letter sent to Biden on Monday.

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“Since mid-July, Republicans have clearly stated that Democrats need to raise their debt limits themselves,” McConnell wrote. “Transpartisan is not a switch of light that Pelosi and Schumer leaders may turn over to borrow money and turn over to use it.”

“For two and a half months, we simply warned that debt restrictions would have to be dealt with alone, as your party wants to govern alone,” McConnell added, referring to the reconciliation efforts. ..

As the leader of the Senate Caucus, McConnell wants to protect his fellow Republicans ahead of the 2022 midterm elections. Despite economic needs, Republicans voting for debt caps or suspensions are attacked by primary challengers who may spin up borrowing limits to support more spending It is vulnerable to it.

Raising or suspending debt caps will not approve new government spending, but the Treasury will be able to pay off debt and interest payments as a result of previous spending. Yellen and other economists compare this process to raising credit card borrowing limits.

Even if the Biden administration does not pass new spending, legislators still need to approve suspension or withdrawal restrictions to allow the treasury to pay off national legislation.

But as Democrats are rushing to cut the $ 3.5 trillion social safety net bill, some Republicans equate the vote to raise the cap as an implicit approval of the initiative.

“The Democratic Party wants to raise the debt cap higher than it needs to pay $ 3.5-5 trillion in spending,” Republican Senator Pat Toomey said on Tuesday. “As the Democrats say, if the failure to raise debt caps is disastrous, they use the same mechanisms they currently use to advance the spread of taxes and spending to raise debt caps. Will let: Reconciliation. “

The Democratic Party argued that raising the limit should be a bipartisan effort and said it supported raising the limit under former President Donald Trump’s administration. The party is also wary of agreeing to include a debt cap in their settlement bill, given how much work the law requires before both moderates and progressives agree. There is.

Schumer told a colleague in a letter dated Monday that the Chamber of Commerce would try to pass a debt cap bill before the weekend.

“Let’s clarify the challenges ahead of us. We must submit a bill dealing with debt restrictions to the president’s desk by the weekend,” he wrote. “We cannot afford to wait until October 18, as it is our responsibility to reassure the world that the United States will fulfill our obligations in a timely manner and that we will never have the full trust and credibility of the United States. .question.”

Biden accuses Republicans of urging Congress to raise debt limits this week

Source link Biden accuses Republicans of urging Congress to raise debt limits this week

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