Republicans say Democrats shouldn’t be called their bluff in bringing the U.S. economy to the brink of economic disaster.
With time running out for Congress to raise the debt limit, Republican senators are betting that Democrats will blink first and lift their own cap through a complex process known as reconciliation, which will allow the Democratic caucus to pass only with the support of its 50 senators. They believe that since the Democrats are controlling the government, the people will blame the Democrats for not doing everything they can to raise the limits of Democracy.
“We’re not talking nonsense,” Sen. John Cornin (R-Texas) told Halfpost.
The Senate is basically tied to a high-stakes game of chicken, and both sides are sure the others will fall behind. Republicans are hoping for a Philibuster law to raise the debt limit for the third time this week. They refuse to allow Democrats to vote directly or down the most with the upper hand limit.
“Democrats are willing to do all they can to raise this,” President Joe Biden said Monday, urging GOP senators to drop their filibusters. “Republicans just have to let us do the work. Get off the road. “
Senate Minority Leader Mitch McConnell (R-Ki.) Said Republicans would not allow a simple majority vote.
“This will require the consent of everyone from the Republicans to lower the limit to 51,” McConnell said Tuesday. “It won’t.”
For the past 11 years, the debt limit has been a legal limit on how much the federal government can borrow when Congress approves spending that may be covered by incoming tax revenue. The current limit is 28.4 trillion.
Congress has adjusted the limit almost 100 times in the last century, including three times during the Donald Trump administration, when Democrats agreed to suspend the limit without making any demands. Republicans are now refusing to cooperate as Democrats return to the White House.
Treasury Secretary Janet Yellen said her agency would run out of cash around October 18, meaning it could start defaulting on payments to Treasury bondholders or even beneficiaries of programs such as Social Security. This gives lawmakers less than two weeks to avoid defamation.
Yield warned on Tuesday that a default could cause a recession. “Failure to pay the government’s bill would be fatal,” Yellen told CNBC.
Republicans argue that Democrats should manage ceiling limits through reconciliation, a complex budget process that could take weeks to complete. Any Republican senator can delay bill payments by increasing the reconciliation limit and reconciling, increasing the chances of default. Even waiting until the last minute to increase the minute limit can lead to recession.
Senate Majority Leader Chuck Schumer (DN.Y.) said Tuesday that “we do not have the luxury of using a drag, complex and risky process.”
Some GOP senators said Democrats would be willing to vote to increase the debt limit if they abandoned their plans to pass a protection net and climate package, the Build Back Better Act. As a “radical” attempt to turn American society into socialism, the GOP is moving away from restrictions, which will be financed through taxes on the rich. The bill includes funding for free community colleges and pre-kindergartens, monthly payments to most families with children, expanded healthcare and new subsidies for green energy.
“I will make that deal in a minute in New York. That’s it, “Senate Minority Whip John Thun (RSD) told Halfpost.
But other Republicans have said they would not oppose raising the debt limit – even after Democrats withdrew their efforts to pass the Build Back Better Act after the Senate and White House retreated in 2020.
“Probably not because they want open-ended spending. We want some sort of constraint,” Sen. Richard Shelby (Ala.) Said when asked about the speculative proposal.
Sen. Ron Johnson (Wis.) Said he would not accept the deal, saying Democrats could “throw it away and then bring it back” after he extended the deal.
Cornelius added, “Once you increase the debt limit, they will be able to spend a lot more money unilaterally.”
Democrats can use the reconciliation process to increase the debt limit so much that it never becomes an issue again, or set it so that it automatically matches the amount of extra spending approved by Congress. Democrats, however, aren’t taking such ideas seriously, probably because not all 50 senators in the Democratic caucus will support it.
In most cases, Republicans say a federal default would be catastrophic and should be avoided, although they will not raise a finger to help Democrats avoid it.
The mere threat of default in 2013, when Republicans sought to cut spending in exchange for raising the limit, forced investors to avoid Treasury securities, which serve as a benchmark across the credit market. A federal default will likely cascade through the financial system and result in higher orrow costs for everyone.
But some lawmakers believe the Oct. 18 deadline for the Treasury is not a firm one and will take longer to develop bad consequences.
“Whatever happens, the Treasury is actually saying, ‘OK, we have to prioritize how we’re paying the bill.'” Sen. Mike Rounds (RSD) told Halfpost. “None of us want to see it.”
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