WASHINGTON — Republicans are eyeing the debt limit and government funding deadlines as a way to force Democrats to the negotiating table for spending cuts, should the GOP regain control of Congress following the midterm elections.
Republicans unhappy about government spending could move to shut down the government, a tactic unsuccessful for the GOP in past battles over Obamacare and the Trump border wall. Their potential refusal to adjust the debt limit could bring the nation to the verge of a damaging default, economic experts say.
The debt limit, currently set at $31.4 trillion, allows the Treasury Department to borrow money in order to pay all of the nation’s bills in full and on time. When the federal government nears that limit, likely in the second half of 2023, it can either raise it to a new spending level or suspend it through a certain date.
Taking no action—and thus defaulting on the debt— would mean the U.S. government has no more borrowing authority and can only spend what it brings in through taxes and other revenue streams.
That would lead to unprecedented cuts and would likely affect payments for Social Security, Medicare and Medicaid as well as hundreds of other federal programs, along with a tide of economic repercussions.
U.S. House Republican Leader Kevin McCarthy, who hopes to become speaker if the GOP regains control of the House, told Punchbowl News last week that he’s likely to leverage the debt limit for reductions in federal spending.
“You can’t just continue down the path to keep spending and adding to the debt,” the California Republican said. “And if people want to make a debt ceiling [for a longer period of time], just like anything else, there comes a point in time where, okay, we’ll provide you more money, but you got to change your current behavior. We’re not just going to keep lifting your credit card limit, right? And we should seriously sit together and [figure out] where can we eliminate some waste? Where can we make the economy grow stronger?”
When asked if spending cuts would need to include changes to entitlement programs like Social Security and Medicare, McCarthy said he didn’t want to “predetermine” negotiations.
Republicans are projected to regain control of the U.S. House following the midterm elections, though whether they’ll become the majority in the Senate is less clear.
The Cook Political Report with Amy Walter changed its prediction for House control this week from Republicans gaining 10 to 20 seats to the GOP picking up 12 to 25 seats.
The future of the 50-50 Senate is less clear, with the Cook Political Report rating three seats held by Democrats and two held by Republicans as “toss up.”
Past standoffs
One result of a stalemate over government spending could be a government shutdown at some point in 2023, a move the GOP has used in the past to try to get its way.
Republicans, however, have never pushed the country past the debt limit and into default, a move that would likely send the stock market and the world economy into a tailspin. But they pushed up close to the line in a debt limit crisis in 2011, during the Obama presidency, leading S&P to downgrade the nation’s credit rating to AA-plus.
During the Trump administration, lawmakers from both political parties voted three times to suspend the debt limit. Congress voted on the debt limit once during the Biden presidency, raising it by $2.5 trillion on a mostly party-line vote in December 2021. Illinois Rep. Adam Kinzinger was the sole Republican in Congress to vote to raise the limit.
The renewed debate about government spending and the debt limit follows record, trillion-dollar spending during both the Trump administration and under President Joe Biden, pushing the nation’s debt upward.
No specifics yet
Republicans have not been clear about what government spending should be reduced.
They so far have not released a detailed plan for…
Read More: A GOP showdown over the debt limit could grip Congress and the nation next year