(TheLastPatriotNews.com) – The US government reached its $31.4 trillion borrowing ceiling on Thursday, leaving America at risk of a debt default in the coming months unless Democrats and Republicans reach a limit-raising agreement.
President Joe Biden’s Treasury Secretary Janet Yellen informed the US Congress last week that her department could use emergency measures to delay a potential default till June 5.
The new Republican majority in the US House of Representatives aims “to use the time until” then to exact spending cuts from Biden and the Democratic-led Senate,” according to a Reuters report cited by Newsmax.
“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Yellen told Congress leaders in her debt ceiling letter on Thursday.
She warned there was “considerable uncertainty” even about the June date because of the government revenues and payment forecasts in the next few months.
While the Republicans have voiced their hopes to get the Democrats to agree on spending cuts in exchange for raising the debt ceiling, the latter have stated they wouldn’t negotiate any deals to that end.
According to the report, neither the GOP lawmakers nor Biden’s Democrats are “willing to budge.”
Per the Republicans’ “debt prioritization” plan, if the debt limit is breached during the talks, the Treasury would have to focus on debt payments and possibly Social Security and Medicare.
Meanwhile, the director of the White House National Economic Council, Brian Deese, expressed the Biden administration’s position that the Republicans could endanger America’s fiscal standing.
“This is not that complicated. This is not about new initiatives or new opportunities. This is about meeting the obligations that this country has already made,” Deese told CNN.
The possibility of an extended political standoff has raised fears of a repeat of the 2011 debt battle which resulted in the downgrade of America’s credit rating and “years of forced domestic and military spending cuts.”
“We’re not going to default on the debt. We have the ability to manage servicing and paying our interest. But we similarly should not blindly increase the debt ceiling,” Republican US Rep. Chip Roy of Texas said.
He rejected the Democrats’ arguments that a debt ceiling dispute could rile up markets and cause a recession.
“That’s what they say every time. It’s like clockwork. We’re already barreling toward a recession. The question is what it’s going to look like – unless the combination of monetary policy and fiscal policy saves us from our stupidity of having spent so much money,” Roy elaborated.
The GOP plan provides for balancing the federal budget in 10 years. It proposes to do that by limiting discretionary spending to 2022 levels while eliminating or downsizing specific federal programs.
“We are optimistic that Democrats will come to the table and negotiate in good faith. There’s a lot of room to negotiate when it comes to steps that can be taken to address the fiscal crisis that we find ourselves in,” commented Republican US Rep. Ben Cline of Virginia.
What is your opinion? Do you side with the Republicans or the Democrats regarding what to do about the fact that the United States has hit the debt ceiling? Please share your views by emailing [email protected]. Thank you.
The U.S. government hit its $31.4 trillion borrowing limit Thursday, amid a standoff between the Republican-controlled House of Representatives and President Joe Biden's Democrats that could lead to a fiscal crisis in a few months. https://t.co/8AqX2lQhdE
— NEWSMAX (@NEWSMAX) January 19, 2023