Kevin McCarthy says the US will not default on the debt ceiling fight
House Speaker Kevin McCarthy spoke to reporters and a live-streamed audience Monday from the hallway outside his office in remarks about the looming debt-limit battle between congressional Republicans and the White House.
House Speaker Kevin McCarthy (R-Calif.) sought to reassure investors Monday that the U.S. government will not see a first-ever default on its debt as a result of the looming showdown later this year over the Treasury’s borrowing limit.
In live-streamed remarks from the hallway just outside his office, McCarthy said: “Defaulting on our debt is not an option. But neither is a future of higher taxes, higher interest rates and an economy that doesn’t work for working Americans.”
Although billed as “an address,” the remarks, which lasted about 10 minutes, broke little new ground in the standoff. The White House has said it will not negotiate over the border; Republicans say they want unspecified budget changes in return for raising the debt ceiling, with an implied threat of default if they are not appeased.
In a response to McCarthy’s remarks sent to reporters just minutes before they were delivered, White House spokesman Andrew Bates said Republicans want to throw the economy into a tailspin with a debt default.
“Tomorrow, President Biden will show the American people his plan to build on the unprecedented deficit reduction his administration has already delivered by making the wealthiest taxpayers and big business pay their fair share and lowering prescription drug prices, ” Bates said of Biden’s State of the State. Union speech on Tuesday evening.
In his speech, McCarthy repeated several points that Republicans have made before as they seek to paint the White House as unreasonable for not wanting a debt limit increase. He said Social Security and Medicare are “off the table” and that Republicans would “preserve our ability to defend this nation against threats abroad,” which could be seen as a promise of no cuts in defense spending.
Defaulting on our debt is not an option. But neither is a future of higher taxes, higher interest rates and an economy that doesn’t work for working Americans.House Speaker Kevin McCarthy (R-Calif.)
The government bumped up against the $31.38 trillion mark in January, forcing the Treasury to dip into its bag of accounting maneuvers to avoid breaching it.
While these “extraordinary measures” will give the Treasury some time to continue borrowing, it’s unclear exactly how much extra time it will have. Treasury Secretary Janet Yellen has it told the lawmakers she did not expect to breach the debt ceiling until at least early June, but offered no more specific timeline.
A battle over the debt limit in 2011 between Barack Obama’s White House and a Republican House brought the Treasury Department days short of the alleged date when it could no longer legally borrow or pay all past due bills. Although a deal was eventually reached, the episode saw the credit rating agency Standard & Poor’s downgrades the creditworthiness of US debt for the first time ever.