WASHINGTON – President Joe Biden made remarks on the U.S. debt ceiling on Monday, as the country quickly approaches its federal borrowing limit and lawmakers clash over points on its legislative agenda.
The United States has never defaulted on its debts in the modern age and historically both sides have voted to increase the limit. Treasury Secretary Janet Yellen said if the current cap of $ 28.4 trillion was not raised by October 18, the United States would likely face a financial crisis and economic recession.
Increasing or suspending the debt limit allows the federal government to pay off obligations already incurred. It does not authorize new spending.
House Democrats voted in September to suspend the debt limit until the end of 2022. But Republican senators say Biden and the ruling Democrats should go it alone, as they are also trying to put in place a multibillion-dollar package of tax increases on the rich and new spending on children, health care, infrastructure and the environment.
“Well, I hope the Republicans aren’t irresponsible enough to refuse to raise the debt ceiling and obstruct the debt ceiling,” Biden said Saturday before leaving the White House. “It would be totally unacceptable. It has never been done before, and so I hope it does not happen.”
President Joe Biden speaks to members of the media before boarding Marine One on the South Lawn of the White House in Washington, DC, October 2, 2021. Photographer: Michael Reynolds / EPA / Bloomberg via Getty Images
Kentucky Republican Leader Mitch McConnell argued Democrats should pass a debt limit extension with the same budget tools they use to try and pull off the $ 3.5 trillion effort to expand programs social safety net and fight climate change. He reiterated the warning when the Senate opened on Thursday, even as Democrats called the option “not launched.”
Lawmakers have raised or suspended the debt ceiling nearly 80 times since 1960. Democrats have joined the Republican majority in the Senate in doing so three times during Donald Trump’s presidency.
Last week, Biden signed legislation to avoid a partial federal shutdown and keep the government funded until December 3. .
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Arguments in both houses on the debt ceiling followed similar themes.
“You’re more interested in punishing Democrats than preserving our credit and that’s something I really have a hard time understanding,” said House Rules Committee Chairman Jim McGovern, D-Mass ., to Republicans. “The idea of not paying the bills just because we don’t like (Biden’s) policies is the wrong way to go.”
Steadfast, Republicans have argued that Democrats have chosen to advance their political priorities on their own and are therefore responsible for raising the debt limit themselves.
“As long as the Democratic majority continues to insist on spending money hand in hand, Republicans will refuse to help them raise the debt ceiling,” said Representative Tom Cole, R-Okla.
The Treasury has taken steps to preserve liquidity, but once it is depleted, it will be forced to rely on incoming income to pay its obligations. This would likely mean delays in payments to Social Security recipients, veterans, and government officials, including military personnel. The Bipartisan Policy Center, a think tank, predicts that the federal government would be unable to meet about 40% of the payments due in the weeks that follow.
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The Associated Press contributed to this report. It was reported from Cincinnati.