Congress is rapidly approaching its deadline to raise the debt limit or risk exposure to the nation’s debt, and so far, many members have made no serious plans to prevent a worst-case scenario.
why it matters: America has never defaulted on its debt. If Congress does not take “extraordinary measures” to finance the government, it is “likely to cause irreparable damage to the US economy and global financial markets,” Treasury Secretary Janet Yellen warned last week.
running news: Democrats are banking on at least 10 Republicans to eventually vote for loan growth.
- But Republicans insist they are not bluffing and have remained united in their insistence that if America defaults on its debt, the blood will be on Democrats’ hands.
- “It’s their obligation. They should step up. It’s hard to be in the majority. They’re the ones who will raise the debt limit,” Senate Minority Leader Mitch McConnell (R-Ky.) told Punchbowl News.
What we’re listening to: Nerdshala spoke to more than a dozen senators this week about how he thinks Congress should deal with the impasse.
- Democrats largely told us that they think Republicans are keen to get as close to the deadline as possible, but they will fold after banks, lobbyists and donors call on them.
- “Oh come on, they won’t let us default,” said Sen. Chris Koons (D-Del.). He said he and his Democratic allies think the most likely scenario is for Republicans to “fuss, fuss, fuss, then do it” in an ongoing resolution.
- However, some Republicans said they wanted to let the default happen and blame the Democrats for it.
- “It’s going to be completely determined by the Democrats,” said Sen. Susan Collins (R-Men), one of the few moderate Republicans generally willing to sever ties with his party. “They are the ones whose actions necessitate an increase in the credit limit.”
What are they saying:
- Koons: “We came right against [default] once,” referring to a 2013 conflict. “And the amount of input senior Republicans get from the financial community, I mean, it would be horrifyingly silly.”
- Sen. Kevin Cramer (RN.D.): “I’ve seen nothing but resolution on parts of Republicans. … It would be really, really, really difficult for Democrats to help Republicans raise the debt limit under any circumstances … even if it Leads to a government shutdown.”
- Sen. Cynthia Lumis (R-Wyo.): “I am a ‘no’,” regardless of whether a vote means the government defaults on the debt.
Between the lines: In the coming weeks, Democrats plan to lean even more into their argument Republicans should give as Democrats raised the trillion-dollar threshold during the Trump administration for COVID-19 relief.
- Many Republicans say they don’t mind if Democrats accuse them of double standards.
- He argues that spending on pandemic relief is very different from funding Democratic plans to spend trillions on Biden’s progressive policy agenda.
- “That’s like we’re voting for them [$3.5 trillion] program, if we open the door for them to do that,” Sen. Chuck Grassley (R-Iowa), a member of the Senate Finance Committee, told Nerdshala.