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Republican plans to block house measures could cause unprecedented $ 28 trillion defaults | US politics

Up Republican The Senate is ready to thwart the Democratic Party’s major spending packages, which could lead to a double financial crisis of government closure and the unprecedented huge US default.

The House of Representatives has approved a temporary financing measure that would leave the federal government open until early December, suspend debt restrictions until the end of the 2022 midterm elections, and send the bill to the Senate.

However, Senate minority leader Mitch McConnell has swiftly announced that Republicans will sink the bill in filibuster and not receive the 60 votes required to pass it. This will close the government by default on October 1st and a few weeks later.

Opposition from McConnell means that the Democratic proposal is dead on arrival. And in the absence of serious debate to resolve the high-stakes confrontation, the United States is currently facing the prospect of a $ 28 trillion default government closure.

At stake is the result of unprecedented defaults in federal debt, which could put the economy into an immediate recession, cause the collapse of global financial markets and lead to a downgrade of US credit ratings. there is. Prolonged impasses can lead to millions of jobs lost to the US economy, trillions of household debt wiped out, and unemployment spikes, economists say.

The debt limit corresponds to the amount the US government can borrow to pay the invoice. Most recently, the Democratic Party joined the Republican Party and suspended it until the end of July. The Treasury then used emergency measures to raise debt.

The U.S. has avoided defaults at the last minute, but the latest standoffs are likely to come true as Republicans refuse to tackle debt restriction issues in a bipartisan way. Said a source familiar with the matter.

Treasury Secretary Janet Yellen reiterated the urgency of the situation in a recent letter to Congress, which caused the United States to default in mid-October and “irreparable harm” to the economy if Congress took no action. Warned that it would bring.

Warning of worsening discussions in the House of Representatives and the Senate, Yellen held a personal discussion this month with McConnell and former Republican Treasury Secretaries Steven Mnuchin and Henry Paulson, but they did not resolve the deadlock. ..

The Democratic Party has long argued that the Republican Party would tackle both the government shutdown and debt restriction issues through bipartisan voting, and that it joined the Republican Party when Donald Trump was president and raised the debt cap.

Speaker of the House Nancy Pelosi and Senator Chuck Schumer have also recently reiterated that the increase in government bonds by about $ 8 trillion during the previous administration was largely due to Republicans.

Pelosi said in a recent press conference that debt restrictions need to be suspended, partly due to the tax cuts enacted during President Trump’s time for the wealthy. “We pay by credit card, Trump credit card,” Pelosi told reporters.

But the Democratic plan to combine a temporary spending bill with a suspension of debt restrictions, which Republicans dare to stop, is now against McConnell’s resistance, which shows no sign of reversing the course. I’m hitting head-on.

McConnell will include debt-restricting language in its $ 3.5 trillion infrastructure package for weeks, when the Democratic Party plans to instead pass Schumer in a swift procedure known as a settlement that requires only partisan voting. I suggested that.

However, House Budget Committee chairman John Yarmuth dismissed the proposal on Wednesday as infeasible, and his staff “de facto” tackling debt restrictions through infrastructure packages or even as a stand-alone bill. He said he decided it was impossible.

Difficulties include debt limits in the $ 3.5 trillion infrastructure package, Democrats return the bill to the House and Senate Budget Committees, and schedule votes in both meeting rooms, according to sources familiar with the procedure. Is what you need to do.

Yarmouth told reporters that there would not be enough time to rerun the entire process before the approaching end-of-month deadline. So without a Republican reversal, the United States could fall off the fiscal cliff.

“You can redo the process with a budget adjustment bill that just raises your debt limits. The law does,” says Yarmouth. But he warned. “It’s a matter of weeks, so you’re facing a potential deadline.”

Democrats still push forward with unwritten “clean” temporary funding bills to suspend debt restrictions that Republicans have personally proposed not to interfere with filibuster, and then act on debt restrictions in subsequent independent bills May cause.

However, such measures would avoid the imminent disaster of the government shutdown on October 1, but still impose debt restrictions on Congress after confirming that Republican senator Ted Cruz would block a single bill. There is no way to unlock it.

Schumer spokesperson Justin Goodman criticizes McConnell for refusing to join Democrats, which for the past few years has been seen as a routine step in enabling the U.S. Treasury to meet its debt. bottom.

“All Americans will know that Senate Republicans are responsible,” Goodman said.

Republican plans to block house measures could cause unprecedented $ 28 trillion defaults | US politics

Source link Republican plans to block house measures could cause unprecedented $ 28 trillion defaults | US politics

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