“This debt is Trump’s debt. It’s Covid’s debt, ”said Senate Majority Leader Chuck Schumer. “And the bottom line is that Leader McConnell shouldn’t be playing political games with the full faith and credit of the United States. Americans are paying their debts.
Schumer met with Senate Finance Chairman Ron Wyden (D-Ore.) And Senator Elizabeth Warren (D-Mass.) To debrief on the issue Wednesday morning, after McConnell told Punchbowl News he “I can’t imagine a single Republican” voting to raise the debt limit amid Democrats “free for all” for taxes and spending.
Congress has avoided defaults on the country’s finances more than two dozen times in the past three decades. With a particularly uncertain deadline this time around, however, failure to act quickly could create turmoil in financial markets, increase costs for U.S. borrowers, and hurt the government’s credit rating at a time when the Biden administration is focused on a full economic recovery.
Senate Republicans have signaled for months that they likely lack the backing to suspend the debt limit without some spending concessions from the majority party, raising the possibility of yet another standoff at high stakes. A group of GOP senators held a press conference on Wednesday to complain about Democrats’ “tax and spending frenzy”, warning of skyrocketing inflation and strained economic growth.
Senator Lindsey Graham (RS.C.), the leading Republican on the budget committee, said he would have more to say on the debt limit next week. Minority Whip John Thune (RS.D.) said there was no appetite among Republicans for a sharp increase in debt as Democrats piled on that number.
But Warren insisted Wednesday that “there is no compromise,” noting that Democrats voted three times during Donald Trump’s presidency to avoid a debt ceiling crisis.
“We are not compromising with America paying its bills,” she said. “The Republicans are trying to extract something and say their influence is that they will make the United States violate its legal obligations.”
Wyden and Warren bypassed questions on Wednesday as to whether they would try to raise the debt limit thanks to the massive spending program Democrats are trying to pass without Republican support or working with the GOP to suspend the limit until ‘at a later date.
“We just want to do it – period,” Wyden said.
Two years ago, Congress struck a budget deal that suspended the debt ceiling until July 31 of this year. After that, the Treasury Department can deploy a number of tactics to delay the actual deadline and continue paying the nation’s bills on time. But Yellen and economics experts have warned those tactics could wear out sooner than expected.
It has been particularly difficult this year to determine the actual ‘X date’ or the official deadline by which the United States is in default of its financial obligations, due to the uncertainty surrounding spending related to the pandemic.
The last time McConnell and his Republican colleagues asked a Democratic president for a debt limit – almost exactly a decade ago – the country’s credit rating was lowered for the first time in U.S. history. . Democrats are now saying they will not revisit that 2011 standoff that spooked financial markets when then-President Barack Obama was in the White House.
“We saw what the Republicans did to Barack Obama on exactly this issue. This will not happen again under our watch, ”said Wyden. “Mitch McConnell apparently thinks that if he doesn’t get this political agenda – in other words, his particular priorities – we’re going to hit the US economy. It’s not going to happen. “
Senate Budget Chairman Bernie Sanders (I-Vt.) Told reporters on Wednesday he was still working to rally the 50 Democratic senators to a budget resolution, which will unlock the favored reconciliation process for the crossing of the line. Democrats’ $ 3.5 trillion spending party. bill. It is not known if the caucus will come together around an increase in the debt ceiling by accepting this budgetary framework.
Moderates like Sens. Joe Manchin (DW.Va.) and Jon Tester (D-Mont.) Have previously opposed a suspension of the debt ceiling – let alone an increase – citing out of control spending. The tester told POLITICO last month he would rather work with Republicans on a debt ceiling deal, rather than pursue a one-party approach.
Burgess Everett and Marianne LeVine contributed to this report.