Former President Donald Trump wants Senate and House Republicans to cause the U.S. to default on the nation’s credit by refusing to raise the debt ceiling, an unconscionable move that will plunge country into a financial crisis by making the government incapable of paying its bills.
By refusing to raise the debt limit—the maximum amount that the federal government can borrow to avoid defaulting on its obligations—Republicans are once again gambling with catastrophe that jeopardizes Americans’ Social Security benefits, federally-held securities, and the value of the dollar, which is considered a reserve currency in global markets.
The harm to America’s economy would embolden geopolitical adversaries, such as the militaristic adventurism of Russian President Vladimir Putin, ambitions to take back Taiwan of communist Chinese dictator Xi Jinping, and the brutal anti-Western religious theocracy in Iran among others.
Trump, the 2020 election loser, suggested that Minority Leader Mitch McConnell ‘should be impeached’ if he backs a plan for the debt ceiling to be eliminated over fears that the Republican Party can win control of the House in the November midterm elections.
“A default is entirely avoidable, but Republicans refuse to exercise their fiduciary duty and join Democrats in raising the debt ceiling,” said Max Richtman, president of the National Committee to Preserve Social Security and Medicare. “It is a routine matter of congressional business. Senate GOP Leader Mitch McConnell, who has voted 32 times to raise the debt limit (including three times during the Trump administration), says his members will stand stubbornly against it this time. “
Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs. Even a very short-term or limited default would have catastrophic economic consequences that would last for decades.
Several Republicans leaders in Congress have indicated that holding the debt limit hostage to force program cuts in Social Security and Medicare is part of their 2023 playbook.
At some point next year, Congress will need to raise the nation’s debt limit to prevent the United States from defaulting on its financial obligations.
However, key House Republican leaders have recently indicated that they plan to take advantage of the need to increase the federal government’s borrowing cap to force spending cuts to Social Security and Medicare, putting these two critical programs at risk.
Four Republicans vying to become House Budget Committee chairman in the next Congress said that next year’s deadline to raise or suspend the debt ceiling is a point of leverage to extract concessions from Democrats.
The high stakes Republican gambit could set the stage for an explosive standoff, reminiscent of the 2011 negotiations when 60 Republican members of the House Tea Party Caucus took on the Obama administration over spending.
On August 5, 2011, Standard & Poor’s credit rating agency downgraded the long-term credit rating of the United States government for the first time in its history.
“As the world’s dominant reserve currency, the international need for dollars has allowed the United States government to borrow at lower costs, giving Americans an advantage worth in excess of $100 billion per year,” said political strategist James Devine. “The US has an ability to literally print money that is valued all over the Earth but Republicans want to sacrifice that to gain a short term opportunity to extort concessions from the White House.”
The international community characterized the political brinkmanship in Washington in 2011 as playing a game of chicken, and criticized the US government for “dangerously irresponsible” actions.