President Joe Biden has requested that House Speaker Kevin McCarthy negotiate the debt limit during a meeting scheduled to take place on May 9 to avoid default.
This move contradicts the White House’s previous official position. While travelling in Israel, McCarthy received a call from Biden to negotiate raising the debt limit after days of stonewalling tactics.
“We are not negotiating on this. We’ve been very clear on this,” said White House press secretary Karine Jean-Pierre last Thursday.
On Wednesday, McCarthy and House Republicans passed a bill to raise the debt limit.
The Biden administration was reportedly taken by surprise when McCarthy successfully passed the bill. McCarthy’s unpredicted victory apparently left the Biden administration flat-footed.
“It’s not a plan. It’s a recipe for economic disaster,” said Jean-Pierre on Monday about the House’s bill. “They [House Republicans] need to do their job. Congress must act. It is their constitutional duty.”
The White House’s stonewalling position remained consistent through Monday afternoon. However, about an hour after the White House press briefing, Biden called McCarthy.
As Biden and McCarthy prepare to negotiate, Senate Majority Leader Chuck Schumer has announced hearings on the House bill as a public relations attempt to condemn it. Schumer has refused to enact his own legislation or hold a vote on the House’s bill.
Raising the debt ceiling allows the government to borrow more money to fund its activities, but it also has significant negative consequences for both the economy and national security.
First, raising the debt ceiling can lead to an increase in interest rates, making it more expensive for the government to borrow money. This can cause a ripple effect throughout the economy, leading to higher borrowing costs for businesses and consumers, which can reduce investment and consumer spending. This can slow down economic growth and reduce job creation, ultimately harming the overall health of the economy.
Second, excessive debt can also undermine national security. When a country’s debt reaches unsustainable levels, it can put pressure on the government to cut spending on essential programs, such as defense and infrastructure, which can weaken the country’s ability to defend itself and its interests. Additionally, high levels of debt can make a country more vulnerable to economic instability and foreign influence, as other countries may hold a significant amount of its debt.
Furthermore, failing to raise the debt ceiling can lead to a default on the country’s obligations, causing a catastrophic impact on the economy and national security. This can result in a loss of confidence in the government, a downgrade of the country’s credit rating, and a rise in interest rates, leading to a vicious cycle of debt and economic instability.
While raising the debt ceiling may be necessary in certain situations, it should be done with caution, as excessive debt can harm both the economy and national security. The government must balance its need for funding with the long-term impact on the country’s financial and national security.
This piece was written by LifeZette on May 2, 2023. It originally appeared in LifeZette and is used by permission.
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