Treasury Secretary Janet Yellen said the U.S. is projected to reach its roughly $31.4 trillion borrowing limit in less than a week – by Jan. 19.
In a letter to House Speaker Kevin McCarthy, R-Calif., on Friday, Yellen also warned the department would soon have to begin taking “extraordinary measures” to stave off a default to buy time for Congress to find a bipartisan solution.
It’s starting. The woes of the debt limit. It figures that McCarthy would get the bad news.
But the new speaker didn’t budge in an interview with Maria Bartiromo.
“Let’s take a moment and realize why did we get here,” he said. “I mean, if you look just in the last four years that Democrats were in the majority, they increased discretionary spending by 30%. When Republicans were in majority for the eight years prior they didn’t increase it by $1. …
“In the last two years, [Democrats] have taken us from spending 4 trillion to 7 trillion. For the White House to say they won’t even look at it, that they can’t find one penny out of a dollar of eliminating waste. I think they’re just trying to put us into bankruptcy. What I am saying, and it’s my conversation with the president on our first conversation, let’s sit down together. Let’s look at the places that we can change our behavior. The first thing I would say is, why don’t you make the House and Senate both produce a budget? They don’t produce a budget. So, you know, they’re wasting money.
“If we go back to ’22 levels, that was what we were spending just two or three weeks ago. That’s not cutting defense by 75 billion. Does defense get more than $800 billion? Are there areas that I think they could be more efficient in? Yeah. Eliminate all the money spent on ‘wokeism.’ Eliminate all the money that they’re trying to find different fuels and they’re worried about the environment to go through. I want our men and women trained to be able to defend themselves, to secure, to have the best weapons systems possible.”
In other words, McCarthy is not being fooled again.
Why should he? Democrats have been spending like drunken sailors for two solid years. Now the check comes due. Joe Biden, all the Democrats and all the media are screaming about the debt limit. We’ve seen this show too many times.
It’s not an accident that the debt limit has been hit. It’s not a mystery that this day would come. Yellen says the approaching debt limit will force the Treasury to launch “extraordinary” cash management measures before the limit ultimately is reached in early June.
She urged the lawmakers to act quickly to raise the debt ceiling to “protect the full faith and credit” of the United States. That’s something we have to do all the time – not just when the debt limit hits.
“This should be done without conditions,” the nit-wit White House spokesperson Karine Jean-Pierre told reporters last week. “There’s going to be no negotiation over it.”
We all have to be hard-liners now.
The Republicans in the House will call on the Treasury to keep making interest payments on the debt as we always have. It will also stipulate the Treasury should continue making payments on Social Security, Medicare and veterans benefits and fund the military as always.
But the Democrats love this scenario.
Senate Majority Leader Chuck Schumer, D-N.Y., and House Democratic leader Rep. Hakeem Jeffries of New York, in a joint statement, said, “Congress must act on legislation to prevent a disastrous default, meet our obligations and protect the full faith and credit of the United States.”
“A default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America’s working families on everything from mortgages and car loans to credit card interest rates,” the leaders said in their statement.
McCarthy has made little secret of the fact that Republicans intend to demand massive spending cuts to the federal budget in exchange for approving an increase in the debt ceiling.
It would be a good time to request an audit on the Fed, as well.
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