Biden pushes Congress to raise debt limit this week, urging GOP to 'just get out of the way'
- President Joe Biden on Monday blamed Republicans for blocking efforts to raise or suspend the U.S. borrowing limit and avert a first-ever default on the national debt.
- Biden slammed the GOP for what he called hypocrisy: Adding nearly $8 trillion to the U.S. debt during the Trump administration and now refusing to pay for it.
- Republicans are "threating to use their power to prevent us from doing our job: Saving the economy from a catastrophic event," Biden said.
President Joe Biden on Monday blamed Republicans for blocking efforts to raise or suspend the U.S. borrowing limit and avert a dangerous first-ever default on the national debt.
The president slammed the GOP for what he described as hypocritical behavior: adding nearly $8 trillion to the U.S. debt during the Trump administration and later refusing to pay for already-approved tax cuts and spending.
Biden said that Republican leaders rejected a White House request that they forgo a filibuster and allow Democrats to pass legislation to raise the ceiling with a simple majority instead with a 60-vote margin.
That plan would theoretically relieve any GOP senators from approving a ceiling increase while simultaneously allowing Democrats to avoid putting a borrowing limit measure into their reconciliation bill that seeks to overhaul the U.S. social safety net.
Republicans "won't vote to raise the debt to cover their own spending," Biden said from the White House. "Not only are Republicans refusing to do their job, they're threating to use their power to prevent us from doing our job: Saving the economy from a catastrophic event."
"I think, quite frankly, it's hypocritical, dangerous and disgraceful," he added. "Just get out of the way."
Senate GOP leader Mitch McConnell's office didn't immediately respond to CNBC's request for comment on Biden's remarks.
The Treasury Department warned last week that lawmakers must address the debt ceiling before Oct. 18, the so-called drop-dead date when officials estimate the U.S. will exhaust emergency efforts to honor its bond payments.
Economists can only guess at the consequences an unprecedented U.S. default would have, but many — including Treasury Secretary Janet Yellen — say they would be "catastrophic."
Yellen has stressed to House Speaker Nancy Pelosi, D-Calif., that diminished confidence in Washington's ability to make good on its IOUs on time would likely spark a jump in interest rates across the economy, tarnish the dollar's role as the globe's reserve currency and send shockwaves through financial markets.
Politicians in both parties acknowledge that the debt ceiling must be increased or risk economic calamity. Where Republicans and Democrats disagree is on how to lift the limit, with each trying to use the issue as a political cudgel.
Republicans, frustrated by what they view as Democrats' reckless spending plans, say Pelosi and Senate Majority Leader Chuck Schumer, D-N.Y., should include a ceiling suspension in their wide-ranging social policy and climate bill.
Democrats are using a special process known as budget reconciliation to try to pass trillions in spending to expand and create education, health care, climate policy and other programs. Reconciliation would allow the party to pass that bill with a simple majority in the Senate versus the usual 60-vote requirement.
McConnell, R-Ky., has made it clear no member of his caucus will support efforts to raise the ceiling and argues that responsibility rests with Democrats, who control Congress and the White House.
The minority leader underscored that commitment in a letter sent Monday to Biden.
"Since mid-July, Republicans have clearly stated that Democrats will need to raise the debt limit on their own," McConnell wrote. "Bipartisanship is not a light switch that Speaker Pelosi and Leader Schumer may flip on to borrow money and flip off to spend it."
"For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well," McConnell added, in reference to the reconciliation effort.
McConnell, as the leader of the GOP caucus in the Senate, wants to protect his fellow Republicans ahead of the 2022 midterm elections. Republicans who vote for a debt ceiling or suspension — despite its economic necessity — are vulnerable to attacks from a primary challenger who could spin a borrowing limit increase as an endorsement of even more spending.
Increasing or suspending the debt ceiling does not authorize new government spending, but rather allows the Treasury Department to pay off debt and interest payments the result of prior spending. Yellen and other economists compare the process to a hike of a credit card borrowing cap.
Even if the Biden administration had passed no new spending, lawmakers would still need to approve a suspension or limit increase to allow the Treasury to pay off the nation's bills.
But with Democrats rushing to cut back their $3.5 trillion social safety net bill, some Republicans equate a vote to raising the ceiling as an implicit endorsement of that initiative.
"The Democrats want the GOP to raise the debt ceiling higher than would be otherwise needed to pay for their $3.5-$5 trillion spending spree," Sen. Pat Toomey, R-Pa., wrote in a Twitter post Tuesday. "If a failure to raise debt ceiling is as calamitous as the Democrats say, they will use the same mechanism they're using now to advance their tax-and-spending spree to raise the debt ceiling: reconciliation."
Democrats contend that increasing the limit ought to be a bipartisan effort and note that they supported increases to the ceiling under former President Donald Trump's administration. The party is also wary of agreeing to include the debt ceiling in their reconciliation bill given how much work the legislation needs before both moderates and progressives will agree to it.
Schumer told colleagues in a letter dated Monday that the chamber will attempt to pass a debt ceiling bill before week's end.
"Let me be clear about the task ahead of us: we must get a bill to the President's desk dealing with the debt limit by the end of the week," he wrote. "We do not have the luxury of waiting until October 18th, as it is our responsibility to re-assure the world that the United States meets our obligations in a timely fashion and that the full faith and credit of the United States should never be in question."