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    Monday, May 20, 2024

    Courtney: Every member of Congress should ‘be a grownup’ and raise debt limit

    Rep. Joe Courtney, D-2nd District, on Thursday urged every member of Congress to “be a grownup” and raise the debt ceiling, warning that the economic “consequences of fooling around with this are very grave.”

    The U.S. reached its statutory debt limit ― how much money the government can borrow to pay its bills, for spending Congress and the president already approved ― of $31.4 trillion on Thursday.

    The White House has said it will not negotiate on the debt limit, a position Courtney supports, while House Speaker Kevin McCarthy and other House Republicans have said a deal must include spending cuts.

    “You don’t use a lever to blow up the world’s financial markets to get your way,” Courtney told The Day.

    “Going back to 2007, when I first came to Congress, I voted to protect the full faith and credit of this country, regardless of whether it was George Bush that was president, Barack Obama, Donald Trump, or Joe Biden.”

    He noted that Congress voted to raise or suspend the debt limit three times under Trump, and it was “a pretty bitter pill for people like me” because it helped pay for Trump’s tax cut, but he voted in favor “because I think that’s a solemn duty for all of us.”

    The U.S. debt limit has been routinely raised dozens of times under Republican and Democratic presidents, most recently in December 2021.

    Treasury Secretary Janet Yellen wrote to McCarthy on Thursday informing him of the “extraordinary measures” the Treasury has begun using that will buy time until June, which include suspending some investments.

    “The period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the U.S. Government months into the future,” Yellen wrote. “I respectfully urge the Congress to act promptly to protect the full faith and credit of the United States.”

    While the “extraordinary measures” avert the potential of the U.S. defaulting on its debt ― which could mean millions of job losses ― for a few months, delays in addressing the issue can also have serious economic implications.

    Courtney hearkened back to the 2011 debt-ceiling crisis, when Standard & Poor’s downgraded the credit rating of the U.S. government for the first time in history.

    McCarthy said Sunday on Fox News, “If you had a child and you gave them a credit card, and they kept hitting the limit, you wouldn't just keep increasing it. You'd first see: What are you spending your money on? How can we cut items out?”

    Courtney stressed that raising the debt limit often gets incorrectly represented as “a license for new spending,” whereas it’s about paying existing bills incurred in prior budgets, whether the president was Donald Trump or Joe Biden.

    “This is about keeping the economy and the government functioning. This is not about a new budget,” Courtney said. He added that House Republicans can still present their own budget priorities through the regular committee processes this year, that “no one’s taking that away from them. But I think what the Freedom Caucus wants to do is use the threat of the damage … as a way of forcing their agenda.”

    Republicans are pursing a “debt prioritization” plan that would direct the Treasury to prioritize only certain payments if the deficit ceiling isn’t raised, such as interest payments on debt and military spending.

    Courtney called this “tin foil hat economics” and said the ability to sell bonds “would be completely undermined” if the U.S. only pays certain bills.

    “This idea was floated back in 2011, and was just completely rejected, because you can’t play games with the full faith and credit of this country,” Courtney said.

    A debt prioritization plan was reportedly part of an agreement that helped McCarthy win the speakership. Punchbowl News last week reported on the existence of a secret three-page addendum McCarthy negotiated with the far-right House Freedom Caucus, which included a debt ceiling strategy and freezing spending at fiscal year 2022 levels among the concessions. Axios reported that multiple GOP aides and members confirmed the document’s existence.

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