President Joe Biden on Friday gave a window into how he’s preparing for a political outlook on the debt ceiling, making it clear he won’t let down Republican lawmakers by threatening to send the nation into default if he doesn’t meet their demands, but adding. that he does not support the efforts of the Democrats to completely remove the debt limit.
In remarks at the White House less than three weeks before the midterm elections, the president touted a $1.4 trillion reduction in the federal deficit and discussed what he sees as dire fiscal consequences if Republicans regain a majority in Congress. Biden argued that the GOP will “threaten the foundations of the American economy if we don’t meet their demands.”
“Next year, threatening the full faith and credit of the United States for the first time in our history, they will collapse the economy, putting the United States in default unless we give in to their demand to cut Social Security and Medicare,” he said. “Let me be really clear. I will not give up. I will not cut Social Security. I’m not going to cut Medicare, even though they work.”
Biden’s decision to directly address the debt ceiling issue and draw red lines for any potential negotiations raises very real concerns among lawmakers facing the possibility of a Republican majority. The debt limit has been a threshold that has fueled fiscal battles – and a downgrade of the nation’s credit rating – for more than a decade, and several House Republicans have made it clear they intend to use the policy to extract profits.
House GOP Leader Kevin McCarthy, likely the next speaker if Republicans win a majority in November, brought the issue to the fore this week with comments that echoed several of his colleagues.
“If people want to do the debt ceiling (longer), like anything else, there comes a point where, OK, we’ll give you more money, but you have to change your current behavior,” he said in an interview with Punchbowl News.
Quietly, there have been debates on both sides of Pennsylvania Avenue over how to deal with the equivalent of the ticking time bomb represented by raising or suspending the nation’s debt limit. While Congress set the cap to reduce government borrowing, lawmakers have typically raised it every time they hit it.
Biden gave a clear response to Republican threats on the same day that several House Democrats sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer calling for legislation to “permanently dismantle the debt limit,” the lame-duck post-election session on Capitol Hill. . The letter, led by Rep. Brendan Boyle of Pennsylvania, was signed by several prominent House Democrats, including Caucus Chairman Hakeem Jeffries of New York.
Biden said Friday that he does not support legislation that would permanently repeal the debt ceiling, a proposal he called “reckless.” However, there are other potential ways to tackle the debt limit during the lame duck session, although tight timelines and busy agendas would make any effort cumbersome.
Biden’s stance on the issue contrasts with Treasury Secretary Janet Yellen, who has expressed support for legislation to lift the debt ceiling in 2021.
“I think it’s increasingly harmful for America to have a debt ceiling,” Yellen said on CNN’s “Erin Burnett Out Front” last year. “It has led to a series of politically dangerous conflicts, with Americans and global markets questioning whether the United States is serious about paying its bills. It’s flirting with a self-inflicted crisis, and it involves the government issuing conflicting sets of instructions to its Treasury secretary and the president.
Orders to impose a requirement on the Treasury to cover spending, authorize tax collections and not exceed a certain debt limit “could be conflicting,” he said, adding, “It’s an impossible situation.”
He continued, “Congress needs to discuss these issues when they decide to spend in taxes, not every few years, stop and say, ‘Now, we’re not going to let the Treasury Secretary pay the nation’s bills.’