- Advertisement -

Top Republicans and Democrats acknowledged this week that their position on how Congress should raise the debt limit is fraught with major risks to the economy, including job losses and rising borrowing costs.

But both sides are exploring what amounts to mere political pretense, even as a potential government and debt-ridden looms.

advertisement

Senate Minority Leader Mitch McConnell, R-Ky., said Wednesday: “We all agree that America should never default. The debt ceiling needs to be raised.” Republicans are refusing to vote for any legislation that includes raising the debt limit to protest Democrats’ spending, which they say is unprecedented in its amount and level of partisanship.

Congress faced a multitude of key issues, from debt limits to infrastructure in big-stakes legislative poker

- Advertisement -

“I completely agree with the leader that we should never default on our debt,” Sen. Rick Scott, R-Fla., echoed moments later.

Before railing against the consequences of massive government spending and saying that Republicans would not vote to raise the debt limit, Scott said, “If the debt limit is not raised, bad things will happen in this country.”

The ringleaders’ comments are behind the GOP’s insistence that Democrats raise debt limits on their own, making it clear that Republicans are fully aware of the consequences of a loan default. Democrats have said they are also concerned about the risks of default.

Former Treasury secretaries warn Congress, debt limit will be ‘harmful’

“If the default causes interest rates to rise only 1%, that adds a minimum of $200 billion a year to interest rates,” said Sen. Mark Warner, D-VA. “You want to talk about an irresponsible spending program? It’s over $2 trillion in 10 years, just because of the irresponsible.”

Democrats are saying they will bring in legislation to raise the debt limit only in a bipartisan way, although they can raise it along party lines due to a majority in both the House and Senate.

“Bottom line – it will damage our economy dramatically,” Senate Majority Leader Chuck Schumer, D.Y., said. “Over a period of time the default would kill six million jobs, send unemployment to 9%, take $15 trillion out of the economy. Who would want to do that? It could stop payments to Social Security recipients, stop payments to veterans.” Yes, raise interest rates.”

Yellen warns failure to raise loan limit could trigger ‘economic catastrophe’

But even so, neither Republicans nor Democrats have shown any signs that they will budge on their positions, as the country moves toward a situation that could damage the credit rating of the United States, even as it cuts its debt. But don’t make a mistake.

“My advice to this Democratic government… don’t play Russian roulette with our economy,” McConnell said. “Step up and raise the loan limit so that you are engaged throughout the year. Hence no effort on their part to describe our position as irresponsible… they have an obligation to increase the credit limit and they will do it.”

Asked Tuesday whether Democrats have any backup plans for raising the debt limit, Schumer retorted: “Ask Leader McConnell. The bottom line is very simple. It must be bipartisan. He doesn’t have a good argument.” We are following it. … to get bipartisan support.”

“This is how it has always been done in the past and should not deviate from the plain and simple,” Schumer said, referring to the bipartisan increase of the debt limit.

The impact from the impasse could be felt later this month, when the government will shut down if Congress does not pass a continuing resolution – the vehicle Democrats want to use to raise the debt limit. They will be much worse later in October if the US moves dangerously close to default or if it does indeed default. Treasury Secretary Janet Yellen has said the US is on a time-lapse track sometime in October.

Thom Tillis, RNC, said Wednesday when asked whether he was confident Democrats would take action to raise the debt limit if Republicans don’t.

Pressed further, he added: “I expect them to do so, trust can be a strong word.”