Topline
House Speaker Nancy Pelosi (D-Calif.) said she wants House Democrats to try to raise the debt ceiling before the current session of Congress ends, a move aimed at preventing a Republican-controlled House from using the debt ceiling as a tool to negotiate other demands.
House Speaker Nancy Pelosi (D-Calif.) said Democrats would attempt to raise the debt ceiling before … [+]
Key Facts
Democrats’ “best shot . . . is to do it now,” Pelosi said Sunday on ABC’s This Week, responding to a question from George Stephanopoulos about whether she wants to raise the debt limit during Congress’ lame duck session, after which Republicans may take over the House.
Pelosi said she fears Republicans will use the battle over the U.S. borrowing limit “as leverage” to cut Social Security spending and “reduce the benefits for our seniors and others.”
It’s still unclear which party will control the House, but Democrats will hold a majority in the Senate for another two years, which Pelosi said improved Democrats’ chances of raising the debt ceiling in the next session of Congress, though the speaker said she hopes “that we could get it done in the lame duck.”
Key Background
The federal government is on track to reach the debt ceiling—a cap on total borrowing—at some point next year. If Congress fails to authorize more borrowing, it could lead to the government defaulting on its obligations, which most experts say would increase borrowing costs and imperil the economy. House Minority Leader Rep. Kevin McCarthy (R-Calif.) indicated in October that Republicans would refuse to raise the U.S. borrowing limit without additional spending cuts, telling Punchbowl News in October, “there comes a point in time where, okay, we’ll provide you more money, but you got to change your current behavior.” McCarthy did not specifically say which programs Republicans would seek to cut, but Democrats fear Medicare, Medicaid and Social Security could be on the chopping block. McCarthy, who is running for House Speaker if Republicans win the majority in the lower chamber, has also indicated a GOP-controlled House could reduce funding to Ukraine.
Big Number
$31.4 trillion. That’s the current U.S. borrowing limit. Congress in December 2021 raised the limit by about $2.5 trillion and will need to lift the cap again next year to prevent the government from defaulting on its debt and legal obligations.
Tangent
Treasury Secretary Janet Yellen and Sen. Elizabeth Warren (D-Mass.) have also come out in support of increasing the debt limit before the new congressional session begins. Yellen said she is “all for” Congress moving to raise the debt ceiling, and suggested the new limit should remain in effect for the duration of Biden’s term, she told The New York Times on Saturday. Failing to increase the debt limit, Yellen said, would be a “devastating economic self-inflicted blow.” Warren, meanwhile, urged Democrats to make “this lame-duck session of Congress the most productive in decades,” starting with lifting the borrowing cap, in an op-ed in the Times published after Democrats won control of the Senate on Saturday.
Further Reading
GOP debt ceiling threats set to revive brinkmanship with White House (Washington Post)
Scoop: Biden officials discussing lame-duck debt ceiling deal (Axios)
Source: https://www.forbes.com/sites/saradorn/2022/11/13/pelosi-says-democrats-will-try-to-raise-debt-ceiling-this-year-as-house-control-remains-uncertain/