House will attempt to suspend borrowing power cap next week | News, Sports, Jobs
House Democrats said on Friday they plan to take action next week to suspend the government’s borrowing power cap, and the White House has stepped up pressure on Republicans by warning state and local governments that severe cuts were to come if the measure failed in the Senate.
Disaster relief, Medicaid, infrastructure grants, school money and other programs face drastic cuts if the debt limit remains in place, the White House warned in a report. ‘information to local governments to put pressure on Republican Senate leader Mitch McConnell, who has vowed to block an increase.
Democrats in the House are moving forward despite the uncertainty. House Majority Leader Steny Hoyer of Maryland on Friday sent a letter to colleagues saying the House would decide to suspend the debt limit, instead of raising it. He did not say whether the action would be tied to a resolution to keep the government in business after the fiscal year ends this month.
The Treasury Department has taken extraordinary steps to keep the government running after the suspended debt limit was restored in August to a level of $ 22 trillion, about $ 6 trillion less than the current total debt. The Treasury’s extraordinary measures will be exhausted by October, creating a potential for default.
The debt limit is the amount of money Congress allows the Treasury to borrow.
It was suspended three times under the Trump administration and has been lifted dozens of times since 1960. Created at the start of World War I so that Congress no longer needed to approve every bond issue, the cap debt has become a political weapon like borrowing. has increased sharply over the past two decades.
McConnell has said he will not sanction further increases and that Democrats have the ability to go it alone.
“With a Democratic President, a Democratic House and a Democratic Senate, Democrats have all the tools they need to raise the debt ceiling,” he added. the Kentucky senator tweeted on Wednesday. âItâs their sole responsibility. Republicans will not facilitate another reckless, partisan tax and spending spree. “
President Joe Biden retorted that Republicans are to blame for the growing deficit and that his plans for child care, schooling, health care, infrastructure and climate change adaptation will be fully paid for at long term.
“Let me remind you that these are the same people who just four years ago adopted the Trump tax cut,” Biden said Thursday during remarks at the White House. “This has just inflated the federal deficit.”
With a total debt of $ 28.4 trillion, the government would be forced to cut programs dramatically unless restrictions on borrowing were lifted or suspended. The risk of a recession and turmoil in financial markets would make it more difficult for states and cities to borrow, while wreaking havoc on public investments in pension plans.
The U.S. Conference of Mayors on Friday called for an increase in the debt ceiling, embracing Biden’s position that the issue should be bipartisan.
âBoth parties in Washington have increased our debt, and both parties have an obligation to ensure that the United States can continue to pay its bills,â he added. said Nan Whaley, Democratic mayor of Dayton, Ohio, and conference chair. “This is one of Congress’ most fundamental responsibilities, and there is no good reason for lawmakers to create a crisis that undermines the full faith and credit of the United States.”
The Biden administration’s fact sheet argues that the pain would be spread across states, as many programs rely on federal dollars. The government’s ability to respond to natural disasters such as hurricanes, earthquakes or forest fires would be reduced.
States would face severe Medicaid shortages because the federal government covers two-thirds of the costs. About 20% of Americans get their health insurance through Medicaid and the Children’s Health Insurance Program.
About $ 100 billion in infrastructure subsidies for highways, airports and public transportation would be in jeopardy. The more than $ 50 billion for special education, school districts serving the poorest students and other programs would also be at risk, as would $ 30 billion in food aid and $ 10 billion for public health. .