When the debt-economy U.S. reached its borrowing limit, conservative Republicans demanded “limiting growth,” and the White House and Democratic Party are responding with “unconditional solution-growth support.”
The US government reached its borrowing limit of $31.4 trillion on the 19th amid a confrontation between the Republican-dominated House of Representatives and President Joe Biden's Democratic administration.
The US media commonly pointed out that this situation “could lead to a fiscal crisis in a few months.”
Treasury Secretary Janet Yellen has informed Congressional leaders, including House Speaker Kevin McCarthy, that the Treasury Department has started using special cash management measures to prevent default by June 5, it reported.
The Republican Party, which occupies the majority of the US House of Representatives, is demanding a’exact spending cut’ from the Senate led by Biden and the Democratic Party until funds are exhausted for the Treasury Department’s’urgent action’.
Republicans, as the House majority, have used the debt ceiling to force cuts in government programs, arguing that the Treasury should prioritize debt service and avoid defaults in deadlock.
"The most important thing to remember is that the United States should never default on its debt," Senator Mitch McConnell, the Republican Senate Majority Leader, told reporters. It is becoming," he said of his growth-limiting strategy.
Congress adopted the Comprehensive Debt Ceiling, the statutory maximum debt a government can issue, in 1939 to limit overgrowth by debt, and Republicans capped discretionary spending at a 10-year level through 2022. It has called for balancing the federal budget.
Senator Chuck Schumer, the Democratic leader of the Senate, said in a statement that "a political cliffhanger on the debt ceiling will take a toll on local economies, American families, and will be nothing more than an economic crisis at the hands of Republicans." demanded
House Republicans, who became the majority, announced they would reject the Senate Majority Leader's "full government funding bill," keeping the budget limited to the $1.66 trillion bipartisan omnibus package approved by Congress late last year. did.
"There will be no negotiations on the debt ceiling," the White House rejected the Republican proposal, and "Congress must address this issue unconditionally, as it has done three times under (former Republican President) Donald Trump," a deputy spokesperson said on the 19th. .
"We shouldn't blindly increase the debt ceiling," said conservative CEO Chip Roy. "No," he told Reuters.
"I am concerned, I will take every opportunity I can, and we will try to engage with Washington as a company so that this does not lead us to a closure," investment bank Goldman Sachs chief executive David Solomon told Reuters on the 19th.
Credit rating agency Moody's told Reuters on the 19th, "Congress believed that it would reach a deal to avoid default, but it failed," and "will contribute to market volatility."
"The prospect of brinkmanship tactics has raised concerns in Washington and on Wall Street about a bruising battle over this year's debt ceiling," Reuters reports. The downgrades and years of forced cuts in domestic and military spending have been triggered.”
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