The White House on Tuesday insisted that the looming debt ceiling crisis be dealt without conditions and there is no room for negotiations on this.
This should not be political brinkmanship. We should be dealing with the debt ceiling without conditions. It is important. We're not going to work our way around this; we're not going to negotiate on this. This is the basic duty of Congress, White House Press Secretary Karine Jean-Pierre told reporters at her daily news conference.
In the last administration, the Democrats and Republicans were able to deal with the debt limit three times. Let's not forget that, she said.
Last week, Treasury Secretary Janet Yellen in a letter to Congress raised the red flag on an imminent debt crisis. Given the sharp differences between the ruling Democrats and the opposition Republicans, who enjoy a majority in the House of Representatives, not handling the issue on time might result in the United States defaulting on its debt commitment, which has never happened in the past.
Republicans have so far insisted on not raising the debt limit which currently is USD 31.381 trillion as approved by Congress last month. This debt limit is the total amount of money that the US government is authorized to borrow to meet its existing legal obligations and is scheduled to reach its statutory limit on January 19.
The United States is the only industrialized nation to have such an arbitrary institution as a debt ceiling, but the players who keep ending up in the same standoff aren't exactly looking to kill it, Time magazine said Tuesday.
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The New York Times warned that a default would most likely rattle markets and carry big risks, no matter how the Federal Reserve and Treasury try to curb the fallout.
In her letter to the Congressional leadership, Yellen asserted that it is critical that Congress act in a timely manner to increase or suspend the debt limit. Failure to meet the government's obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability, she warned.
Indian American Congressman Raja Krishnamoorthi, who is a Democrat, has called for an increase in the debt limit. If we don't raise the debt ceiling, we'll go into default, and only one default is enough to nuke the economy, he said.
Opposing an increase in the debt limit, Republican Congressman Ralph Norman, said that USD31.4 trillion, is a massive amount of debt. The government owes this money because politicians in Washington simply will not stop spending. This has been the case for decades, and Republicans are just as much to blame as Democrats, he said.
We'll have to see how negotiations play out, but the bottom line is this: Republicans need to see some degree of incremental spending cuts in these debt ceiling negotiations. An agreement without some reasonable cuts is unacceptable, Norman said.
Our national debt is approaching a level not just harmful to economic growth and irresponsible to future generations, but dangerous to our national security today. We are entering treacherous waters and must couple any debt ceiling increases with real reforms, said Congresswoman Victoria Spartz.
Huge amounts of politically directed spending and crony capitalism have created a significant oligopoly problem in nearly every market sector - not much different from oligarchs ruling in post-socialist countries, she said.
Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries in a joint statement said that the Congress must act on legislation to prevent a disastrous default, meet America's your obligations and protect its full faith and credit.
A default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America's working families on everything from mortgages and car loans to credit card interest rates, they said.
America pays its debts. Period. There should be no political brinkmanship with the debt limit. It's reckless for Speaker McCarthy and MAGA Republicans to try and use the full faith and credit of the United States as a political bargaining chip. A default would be catastrophic for America's working families and lead to higher costs, Schumer said in another statement.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)