Biden’s Monday criticism came as Congress faces an Oct 18 deadline to borrow more to keep the government running after it has accrued $28.4 trillion in total public debt. McConnell has forced Senate Democrats to a lengthy process that could drag out and make it difficult for them to meet the deadline.
McConnell and Biden have both promised to avoid default but the public fight and political posturing could lead to an economic meltdown. Global economic stability depends on U.S. Treasury Notes. Unpaid debt could cause financial market collapse and send America into recession. Biden pointed out that the debt limit is for borrowing that has occurred under the former President Donald Trump. He said that Republicans are harming the country by preventing the suspension of the limit.
Biden stated at the White House that “they need to stop playing Russian Roulette with the U.S. economic system.” “Republicans need to allow us to do our jobs. Get out of the way. You don’t have to save the country. Get out of the way.
McConnell, unmoved, stated that Republicans had provided the Democrats with a roadmap to deal with the debt ceiling. It was months before they were able to warn them.
McConnell stated at the Capitol, “I suggest that we Democratic colleagues get moving.”
Raising the national debt limit was once a routine vote. But it has become more partisan. Republicans have made it a favorite political tool to force Democrats to vote against more borrowing or demand concessions. McConnell tied the vote to Biden’s multitrillion dollar tax and economic agenda that awaits Congressional approval. Biden claims that the cost of his plan’s debt will not exceed $400,000 and can be paid for through higher taxes on corporations as well as on the wealthy. House Democrats define the rich as those who earn more than $400,000 per year or married couples earning more than $450,000.
Biden stated that he would talk to McConnell. McConnell dug in with his own letter to the president.
“We don’t have a list of demands. “We have been warning you for two and a quarter months that your party wants to govern itself, so it must also handle the debt limit,” the Kentucky senator wrote in a Monday letter.
With 10-year Treasury notes at just 1.5%, the financial markets remain relatively calm. This rate is slightly higher that the record lows last year due to the coronavirus pandemic, but still lower than any time in the 60-year history of Federal Reserve data.
Janet Yellen, Treasury Secretary, has predicted that the government will run out of cash on Oct. 18. This would be a major event that she believes could lead to a financial crisis or economic recession. Monday’s warning by Chuck Schumer, Senate Majority Leader, was that any economy that comes close to that date would be dangerous.
Schumer wrote to Democratic senators, “The consequences of even nearing the X date could prove disastrous for our economy. It could also be devastating to American families. It will raise the cost of borrowing for average Americans, and hinder our economic recovery over long-term.”
Republicans and Democrats are at odds over how to extend the debt ceiling. Republicans insist that Democrats use the same legislative tool as is being used to pass Biden’s plan to improve safety net, health, and environmental programs to get it done. Democrats claim that the extension of the debt limit is a bipartisan effort. The debt cap was established under both presidents.
Schumer stated that if the debt problem is not solved this week, the Senate may be forced to stay in session through the weekend and possibly into the week following when senators are scheduled to return to their home states.
Schumer also spoke about the state of play in relation to the $1 trillion bipartisan infrastructure bill, which has passed the Senate. It is still stuck in the House. Biden’s $3.5 trillion larger effort, which focuses on social programs, the environment, and would be offset by tax increases for corporations and the wealthy, was also discussed. He mentioned that President Obama visited the House Democrats Friday to get support for both measures.
Schumer stated that Schumer encouraged them to work together, to compromise and to find the “sweet spot” that would allow them to finish their work. I agree wholeheartedly with his sentiment – we can accomplish this together if we forget our differences and find common ground within our party.
Biden and progressive House Democrats discussed the plan in a virtual meeting on Monday afternoon. It was discussed by Schumer, Nancy Pelosi, House Speaker and top White House advisors late Monday night at the Capitol.
Pelosi stated that “We are making progress” as she left. Schumer had earlier written to colleagues that they needed to come to an agreement soon, and preferably within days, rather than weeks.
McConnell and Schumer debated the debt ceiling Monday morning in the Senate.
McConnell pointed out that Biden voted against raising debt ceiling when he was a senator, while Republicans controlled Congress and Washington.
Schumer stated that Democrats permitted an up-or down vote back then, rather than requiring the majority of filibusters to be overcome. When he wants to bring up the House-passed legislation that would suspend debt ceiling until December 2022, Schumer said Republicans should follow his lead.
“We don’t ask Republicans to support it when it comes down to a vote. Schumer stated that Republicans are not required to support the bill. Democrats should pass it by themselves, just like the majority party did in 2000.
Schumer stated, “The truth is that we don’t have to wait until Oct. 18 in order to extend the debt limit.” Even a close miss can have devastating consequences.
Biden will travel to Michigan Tuesday to promote his legislative plans as negotiations resume in Washington. Democratic Senators. Senators Democratic. Many House Democrats will not support the smaller bipartisan plan for infrastructure until they reach an agreement on a larger measure.
