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Democrats hit McConnell saying Republicans won’t help raise debt limits | Business

Washington (AP) — Senator Democrats blamed “shameless and ironic” tactics that damage the economy and government credit ratings after saying Wednesday that Republicans would vote against raising federal debt limits.

Democrats are the latest chapter in a widespread budget struggle that is likely to last until fall, with Senate minority leader Mitch McConnell, R-Ky. Reacted after saying it believed that all Republicans would vote against renewing Washington’s ability to borrow money. Governments that have had huge budget deficits for years have to constantly borrow cash to pay off their debts, but their legal authority to do so expires on July 31st.

Expiration of government borrowing powers can lead to federal defaults, which never happened. Analysts say defaults can have a devastating effect on the economy, boosting interest rates, lowering federal credit ratings and boosting government borrowing costs.

“Leaders’ remarks on debt caps are shameless, cynical, and completely political,” said Senate leader Chuck Schumer, DN.Y. “This debt is Trump debt and COVID debt,” he said. It refers to the massive tax cuts of 2017 enacted under former President Donald Trump and the surge in federal spending since the COVID-19 pandemic.

It’s not uncommon for a party that has lost power in the White House to threaten to oppose raising debt caps as a leverage for accurate budget concessions.

The battle also arises because President Joe Biden is also at odds with a trillion-dollar proposal to step up federal spending and raise taxes to pay it to the wealthy and businesses.

Congress suspended its debt cap (federal borrowing limit) two years ago, which will end on July 31st. Federal debt subject to borrowing restrictions was $ 28.5 trillion, up from $ 19.9 trillion when Trump took office and $ 27.8 trillion when Biden took office.

The Treasury can use accounting operations to release cash in a short period of time, but it is unclear when it will run out of that option. Some have suggested that the government could run out of money during August, when Congress will be adjourned. The nonpartisan Congressional Budget Office estimated on Wednesday that the crisis was likely to come in October or November.

The 50 Democrats of the Chamber of Commerce will need help from 10 Republicans to overcome the Senate Republican filibuster, which raises debt caps.

“I can’t imagine this free Republican for taxes and spending to vote to raise debt limits in this environment we are in,” McConnell said on Tuesday. McConnell confirmed these statements to the Associated Press on Wednesday. It’s the day after they did them on Capitol Hill and Punch Bowl News, a publication covering politics.

“We expect Congress to act in the same timely manner as the previous administration,” White House spokeswoman Jen Psaki told reporters about Air Force 1. Lawmakers expanded their borrowing rights several times under Trump.

One option is for the Democratic Party to include the language in a huge bill that will fund many government agencies that Congress is starting to make next year. Failure to enact such measures by September 30, the end of the federal budget year, could result in a government closure.

The Democratic Party can also include a debt limit clause in the $ 3.5 trillion bill that plans to write a funding environment, health, education and family program. Democrats plan to use budgetary operations to protect the bill from filibuster, but it may not be ready for months.

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AP reporter Jonathan Remia contributed to this report.

Copyright 2021 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

Democrats hit McConnell saying Republicans won’t help raise debt limits | Business

Source link Democrats hit McConnell saying Republicans won’t help raise debt limits | Business

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