Biden will threaten Social Security and Medicare and 'bumble into the first default in our nation's history' if he doesn't negotiate raising the debt ceiling with Republicans, Kevin McCarthy says
- House Speaker Kevin McCarthy said a debt ceiling vote will come in weeks in Monday remarks.
- McCarthy said if Biden doesn't come to an agreement with the GOP, it could lead to the first default.
House Speaker Kevin McCarthy has laid down the debt ceiling gauntlet, following months of Democrats and Republicans circling the looming crisis.
In Monday remarks at the New York Stock Exchange, McCarthy hammered in on his desire to meet with President Joe Biden to negotiate a deal to raise the debt ceiling. While the speaker met with Biden in February on the issue, Biden has remained adamant since then that he will not use raising the debt ceiling — and avoiding a catastrophic default on the nation's debt — as a bargaining chip.
But McCarthy has refused to sign off on a clean debt ceiling deal — one that doesn't also include spending cuts — and he said during his remarks that Biden will be responsible should the country default on its debt this summer.
"The longer President Biden waits to be sensible to find an agreement, the more likely it becomes that this administration will bumble into the first default in our nation's history," McCarthy said.
"Let me be clear, defaulting on our debt is not an option," he added. "But neither is a future of higher taxes, higher interest rates, more dependency on China, an economy that doesn't work for working Americans. Let me be clear. A no-strings attached debt limit increase will not pass."
The Biden administration has maintained that it wants a clean debt limit raise, with no addendums or further cuts attached to the package. Treasury Secretary Janet Yellen told Reuters that she was open to looking at ways to reduce the deficit alongside Republicans, "but it can't be a condition or precondition for raising the debt ceiling."
But that seems to be exactly the GOP's plan, as Republicans reportedly prepare a package proposal that would ban student loan forgiveness and put stricter work requirements on food stamps.
The stakes are high: Even a short default would result in 1 million Americans suddenly jobless, alongside a mild recession, according to estimates from Moody's Analytics. The Joint Economic Committee has found that, if a default occurs, Americans might see their private student-loan payments skyrocket up and monthly mortgage payments surge by $150 a month — as well as lose out on $20,000 in retirement savings.
McCarthy confirmed during his remarks that the House will vote on a bill to raise the debt ceiling through next year "in the coming weeks," which will keep the government at 2022 spending levels and limit spending growth over the next ten years to 1% annual growth.
Still, Republicans are on a tight deadline to get a bill to the floor before they go on recess again in May — especially with Democrats unwilling to budge on their stance that raising the debt ceiling should be clean and bipartisan.
Massachusetts Sen. Elizabeth Warren said in a statement following McCarthy's speech that he "went to Wall Street to spread Republicans' message to billionaires and corporate executives: they want hardworking families to pay the cost of keeping the government up and running, while corporations get away with paying as little as possible in taxes – and they're willing to hold our entire economy hostage to get it done."
"House Republicans' proposed budget cuts threaten economic disaster and American jobs, all to protect billionaires and giant corporations. Independent analysis from Moody's shows congressional Republicans' budget cuts could throw 720,000 to over 2.5 million Americans out of work. That's a non-starter," she said. "President Biden must hold firm on behalf of working families, and insist Republicans raise the debt limit swiftly and cleanly as they did time and time again under President Trump."
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