McCarthy Sees ‘Dire Ramifications’ for US If Biden Won’t Negotiate on Debt Ceiling

Kevin McCarthy, Speaker of the House (R-Calif.), wrote a letter on March 28th claiming that if President Joe Biden refuses to negotiate with Republicans on the debt ceiling, there could be “dire ramifications” for “the entire nation.” The Republicans wish to use the issue to pressure Biden into making concessions and reducing federal spending, while Biden has not agreed to negotiate. McCarthy blames Biden for putting an already vulnerable economy in danger by insisting on his extreme stance.

Biden has signed off on trillions of dollars in spending since taking office, causing Republicans to argue that the rise in consumer prices is a result of excessive spending, according to reports. McCarthy warned Biden that if he does not negotiate, any debt ceiling crisis would be his fault. A crisis would hinder the US’s ability to meet its financial obligations, having dire consequences for the country.

‘No Interest in Brinkmanship’

McCarthy wants to do what is best for the American people, without playing political brinksmanship with the debt ceiling. House Majority Leader Steve Scalise (R-La.) echoes the same sentiment, accusing Biden of “trying to cause a debt crisis by waiting and waiting and waiting,” to meet with McCarthy.

The US Congress must approve any increase in the US debt limit before it can be passed to the Senate or the President’s desk. The Federal Reserve is reliant on “extraordinary measures” to keep the government going without congressional approval. If Congress fails to authorise a debt limit increase before the Federal Reserve runs out of leverage, financial analysts predict catastrophic results. The US dollar would be further devalued, leading to greater economic problems which would arise from the country’s loss of credit rating.

GOP Expectations

McCarthy called for several strategies to address the high inflation brought about by reckless government spending. These policies would address the number one issue facing Americans today, and include non-defence spending returning to “pre-inflationary levels,” retrieving unspent COVID-19 relief funds, strengthening federal aid work requirements, and policies to grow the economy and safeguard Americans.

If the White House and Republicans are unable to reach an agreement, Democrats may push policies allowing the government to run without congressional approval, according to reports.

White House Responds

The White House issued a response in a statement, addressing Congress’s constitutional obligation to the debt limit. They also claimed that “the threat of default risks the livelihoods of American small businesses, retirees, and working families, and would hand a massive win to China.” The White House then asked for a clean debt ceiling bill to be passed, quit threatening the country’s economic recovery, and end the games Republicans were playing. Additionally, the President welcomes a separate conversation about the nation’s fiscal future but rejected the fact that the specific cuts requested by Republicans would not reduce the deficit.