Senate Democrats on Wednesday accused Republicans of promoting a “cynical and shameless” ploy that would damage the economy and the government’s credit rating, after the upper house Republican leader said his party would vote against a proposal. to increase the federal debt limit.
Miami World / AP
In the latest chapter of a broad budget battle likely to drag on well into the fall, Democrats reacted a day after Senate Republican Minority Leader Mitch McConnell said he believed all Republicans will vote against renewing. Washington’s ability to borrow money.
The government, which has run huge budget deficits for years, needs to constantly borrow money to pay its debts, but its legal authority to do so expires on July 31.
Should your borrowing authority expire, the government could go into federal default, which has never happened. Analysts say a default could have a devastating impact on the economy, raising interest rates, lowering the federal credit rating and increasing your borrowing costs.
“The leader’s statements on the debt ceiling are brazen, cynical and totally political,” Senate Democratic Majority Leader Chuck Schumer told the full Senate. “This debt is Trump’s debt, it’s COVID debt,” he said, referring to a massive 2017 tax cut enacted by then-President Donald Trump and federal spending that has skyrocketed since the COVID-19 pandemic.
It is not uncommon for the opposite party to the one that occupies the White House to threaten to oppose an increase in the debt ceiling as political lever to obtain budget concessions.
This fight comes as both sides are also at odds with President Joe Biden’s multi-million dollar proposals to boost federal domestic spending and fund it through increased taxes on the rich and corporations.
Congress suspended the debt ceiling – the limit on federal loans – two years ago, but that suspension expires July 31.