Republicans are pushing talks about the US debt ceiling to the brink, staging a risky push as they prepare to leave Washington for a national holiday just days before a potential default that could wreak havoc on the global economy.
House Speaker Kevin McCarthy, a Republican, has been defiant, saying the crisis is not his fault, and warning that Republicans need more time to reach an agreement with President Joe Biden to reduce the budget.
However, it is clear that McCarthy, who came to office with the support of far-right sectors, is now facing a potential crisis.
With the United States commemorating Memorial Day on Monday, lawmakers are currently not supposed to return to work until Tuesday, just two days before June 1 when, according to Treasury Secretary Janet Yellen, the government could begin to find itself without funds to pay its debts and fall into potentially catastrophic defaults.
Credit agency Fitch Ratings has already rated the US AAA credit as “potentially negative”, warning of a possible lower rating due to the political dispute over the debt ceiling.
“This is a battle between extremism and common sense,” said Rep. Katherine Clark, D-Massachusetts.
The Republicans, he added, “want the American people to make an impossible choice: devastating cuts or a devastating debt default.”
The Republicans and the White House have been negotiating for weeks without being able to reach an agreement, in part because the Biden administration never anticipated having to negotiate with McCarthy on the debt, since it always maintained that this issue should not be manipulated to obtain other priorities.
McCarthy is trying to pressure the government into deep spending cuts in exchange for Republican votes to raise the debt ceiling. The White House has promised to keep next year’s spending at the same level as the current one, but the Republican leader insists that’s not enough.
“We have to spend less than we spent last year. That’s the starting point,” McCarthy said.
Failure to raise the debt ceiling, which currently stands at $31 trillion, could lead to a potentially catastrophic federal default and almost certainly lead to economic turbulence, both domestically and internationally.
Retirees and those who depend on Social Security have already been taking precautionary measures.
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