Dems rip Mcconnell after threat to oppose debt limit hike
WASHINGTON — Senate Democrats accused Republicans Wednesday of a “shameless, cynical” ploy that would damage the economy and the government’s credit rating after the chamber’s GOP leader said his party would vote against raising the federal debt limit.
In the latest chapter of a broad budget battle likely to linger well into autumn, Democrats reacted after Senate Minority Leader Mitch Mcconnell, R-KY., said he believes all Republicans will vote against renewing Washington’s ability to borrow money. The government, which has been running huge budget deficits for years, needs to borrow cash constantly to pay its debts, but its legal authority to do that expires July 31.
An expiration of the government’s borrowing authority could lead to a federal default, which has never happened. Analysts say a default could have a devastating impact on the economy, driving up interest rates, lowering the federal credit rating and driving up the government’s borrowing costs.
“The leader’s statements on debt ceiling are shameless, cynical and totally political,” said Senate Majority Leader Chuck Schumer, D-N.Y. “This debt is Trump debt, it’s COVID debt,” he said, a reference to a massive 2017 tax cut enacted under former President Donald Trump and federal spending that’s mushroomed since the COVID-19 pandemic.
It is not unusual for the political party out of power in the White House to threaten to oppose a debt ceiling increase as leverage to exact budget concessions.
This fight comes as the two parties are also at odds over President Joe Biden’s multitrillion-dollar proposals for bolstering federal domestic spending and raising taxes on the wealthy and corporations to pay for it.
Congress suspended the debt ceiling — the limit on federal borrowing — two years ago, but that suspension expires July 31. Federal debt subject to the borrowing limit is $28.5 trillion, up from $19.9 trillion when Trump became president and $27.8 trillion when Biden took office.
The Treasury Department can free up cash for short periods using accounting maneuvers, but it is unclear when it would exhaust that option.