Senator Chuck Grassley, the ranking member of the Senate budget committee, urged Biden to negotiate in “good faith” with McCarthy to reach an agreement. “We pay our bills, and we should do so without reckless hostage-taking from some of the Maga Republicans in Congress.”īiden is scheduled to meet with the top four congressional leaders, including the House speaker, Republican Kevin McCarthy, on Tuesday to discuss the debt ceiling.
“America is not a deadbeat nation,” Biden said last week. Biden has stuck to that strategy, rejecting House Republicans’ proposal and insisting that Congress must pass a “clean” bill raising the debt ceiling without any strings attached. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.ĭemocrats emerged from the 2011 crisis with a determination to never again negotiate over the debt ceiling. For more information see our Privacy Policy. Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. However, as a result of the prolonged standoff over the debt ceiling, the US experienced its first ever credit downgrade. The law included government spending caps, but Congress ended up raising them to avoid painful funding cuts, leading even the architects of the legislation to deem it a failure. In 2011, when congressional Republicans clashed with Barack Obama over the debt ceiling, they ultimately succeeded in passing the Budget Control Act. The drawbacks of playing politics over the debt limit are severe.
“If we don’t want lawmakers to use this risky and flawed process to address growing deficits, then let’s debate and come up with a federal budget process tool to have these debates and trade-offs.” “Right now, the debt limit, as flawed as it is, is the only real, true lawmaker vote available that truly covers and trades off the whole federal budget,” Brian Riedl, senior fellow at the conservative thinktank Manhattan Institute, said at the Senate committee hearing on Thursday. House Republicans’ debt ceiling bill, which narrowly passed the lower chamber last week, would raise the government’s borrowing limit until May 2024 while cutting federal discretionary spending to 2022 levels and capping annual increases at 1%. It’s doing real damage, and we just need to get rid of it.”īut for those looking to curtail the nation’s ballooning debt, which now stands at more than $31tn, the debt ceiling has served as a useful tool to spur budgetary reform. I don’t think that’s the case any longer. “Twenty-five years ago, the debt limit may have resulted in some policy changes. “It’s doing more harm than good,” Zandi said. Although the debt ceiling might have previously spurred bipartisan negotiations over government spending levels and priorities, the threat of default was much too high in the US’s current era of hyper-polarized politics, he argued. Speaking to the Guardian after the hearing, Mark Zandi, chief economist at Moody’s Analytics, described the debt limit as “totally anachronistic”. “The immediate priority is for Congress to cleanly raise the debt limit to avoid driving our economy off a cliff, and then we can get to work making sure we avoid future destructive rinse-and-repeat scenarios.”Įconomists echoed Whitehouse’s point at a Senate budget committee hearing on Thursday, suggesting that Congress should find a new way to handle the government’s borrowing limit. “Extremist Republicans threatening the American people with default – again – puts a very fine point on the need to get rid of this arbitrary mechanism that offers no benefits yet carries with it the power to deliver serious damage,” Whitehouse told the Guardian. Senator Sheldon Whitehouse, the Democratic chair of the Senate budget committee, recently reintroduced a bill that would eliminate what he derides as “the bear trap in the bedroom that is the debt ceiling”. Critics argue that the debt ceiling, created by Congress in 1917, has long since outlived its usefulness and has instead become a political weapon that could ultimately sink the US economy.
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