The showdown over the future of the federal <a href="http://dailywire.com/topic/budget" target="_blank" rel="noopener">budget</a> is taking shape as President <a href="http://dailywire.com/topic/biden-administration" target="_blank" rel="noopener">Joe Biden</a> releases his fiscal year 2024 spending proposal and <a href="https://www.dailywire.com/topic/house-republicans" target="_blank" rel="noopener">House Republicans</a> prepare to leverage their new majority to block the plan.
The White House suggested an <a href="https://www.dailywire.com/news/more-taxes-and-more-spending-heres-what-you-need-to-know-about-president-bidens-newest-budget" target="_blank" rel="noopener">increase</a> in the federal budget from $5.8 trillion to $6.9 trillion over the next fiscal year while reducing cumulative deficits by $3 trillion over the next decade through a number of tax hikes on businesses and wealthy individuals. Households with more than $100 million in wealth would be subjected to a 25% minimum tax, while the top marginal tax rate would also be increased to 39.6% from the current 37% rate. Businesses would see an increase in the corporate tax to 28%, which would split the difference between the current 21% rate and the previous 35% rate that was in effect before the Tax Cuts and Jobs Act of 2017.
The proposal, which also suggested new health care and education subsidies, largely adheres to the Democratic emphasis on redistributive fiscal policy. “This budget builds on our economic progress by making smart, fiscally responsible investments, which would be more than fully paid for by requiring corporations and the wealthy to pay their fair share,” Treasury Secretary Janet Yellen said in a <a href="https://twitter.com/SecYellen/status/1633908057380929571" target="_blank" rel="noopener">statement</a>. “The budget’s growth-enhancing investments will continue the economic progress of the last two years and further boost the economy’s productive capacity.”
Republican officials, who have not yet countered the budget with a proposal of their own, meanwhile <a href="https://www.dailywire.com/news/dead-on-arrival-republicans-slam-biden-budgets-higher-taxes-and-spending" target="_blank" rel="noopener">contested</a> various elements of the plan. “President Biden just delivered his budget to Congress, and it is completely unserious. He proposes trillions in new taxes that you and your family will pay directly or through higher costs,” remarked House Speaker Kevin McCarthy (R-CA). “Washington has a spending problem, not a revenue problem.”
The release of the budget proposal coincides with <a href="https://www.dailywire.com/news/congressional-budget-office-reveals-when-government-will-run-out-of-cash" target="_blank" rel="noopener">negotiations</a> between Biden and McCarthy over the debt ceiling, a measure established by Congress that disallows the federal government from spending beyond the predetermined statutory limit of $31.4 trillion. Yellen <a href="https://www.dailywire.com/news/yellen-warns-congress-extraordinary-measures-have-begun-after-debt-ceiling-breached" target="_blank" rel="noopener">warned</a> lawmakers that the Treasury Department was forced to implement “extraordinary measures” earlier this year to fund the government until early June, after which the government will default.
The House Freedom Caucus, which withheld votes from McCarthy at the beginning of the present Congress until he committed to negotiating with Biden on efforts to reduce the national debt, announced that members would likewise <a href="https://twitter.com/freedomcaucus/status/1634205313623572480" target="_blank" rel="noopener">refuse</a> to support raising the debt ceiling unless various White House policies are rescinded.
Among the initiatives that the Republican lawmakers want to repeal are the $400 billion student debt cancellation executive order, the $80 billion allocation to the IRS enacted under the Inflation Reduction Act, and all unspent stimulus funds earmarked during the lockdown-induced recession. Votes in favor of raising the debt limit are also contingent upon capping discretionary spending at fiscal year 2022 levels for the next decade with a 1% annual growth allowance.
Business leaders and government officials have <a href="https://www.dailywire.com/news/were-going-to-have-to-fix-this-jpmorgan-chase-ceo-sounds-the-alarm-over-soaring-national-debt" target="_blank" rel="noopener">cautioned</a> that a default would likely induce a worldwide financial crisis. Increases in the national debt, however, are unsustainable: the federal government’s obligations surpassed $31.5 trillion, equivalent to roughly 120% of the nation’s gross domestic product. Maintenance costs are meanwhile increasing due to the present <a href="https://www.dailywire.com/news/interest-payments-on-the-national-debt-on-pace-to-surpass-military-spending" target="_blank" rel="noopener">rise</a> in interest rates.
An <a href="https://www.dailywire.com/news/government-must-raise-taxes-40-or-cut-spending-30-to-achieve-fiscal-balance-study" target="_blank" rel="noopener">analysis</a> from economists at the University of Pennsylvania’s Wharton School recently concluded that a 30% decrease in spending or a 40% increase in taxation would be necessary to handle current deficit spending and future obligations. Republican and Democratic administrations alike have overseen <a href="https://www.dailywire.com/news/the-american-people-want-a-real-change-steve-forbes-rebukes-both-parties-for-sinful-government-spending-habits" target="_blank" rel="noopener">surges</a> in debt over the past several decades.

US-POLITICS-BIDEN-STATE OF THE UNION

Democrats And Republicans Fire First Shots In Debt Limit Showdown

Democrats And Republicans Battle Over The Budget

Biden Administration

Budget

Debt Ceiling

Economy

House Republicans

Joe Biden

Kevin McCarthy

National Debt

Politics

Taxes

Sen. <a href="https://www.dailywire.com/topic/joe-manchin" target="_blank" rel="noopener">Joe Manchin</a> (D-WV) called on his <a href="http://dailywire.com/topic/republicans" target="_blank" rel="noopener">Republican</a> and <a href="http://dailywire.com/topic/democrats" target="_blank" rel="noopener">Democratic</a> colleagues on Thursday to implement a compromise that would decrease the <a href="http://dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a>.
The lawmaker’s <a href="https://www.manchin.senate.gov/newsroom/press-releases/icymi-manchin-calls-on-biden-administration-congressional-leaders-to-get-serious-about-the-national-debt" target="_blank" rel="noopener">remarks</a> came after Sen. James Lankford (R-OK) recited President George Washington’s Farewell Address on the Senate floor, a tradition that the upper chamber has <a href="https://www.lankford.senate.gov/news/press-releases/lankford-delivers-george-washingtons-farewell-address" target="_blank" rel="noopener">maintained</a> for more than 160 years to commemorate the founding father’s birthday. Manchin referenced the distaste Washington held for partisan factions as he exhorted <a href="http://dailywire.com/topic/congress" target="_blank" rel="noopener">Congress</a> to address the national debt, which now surpasses $31.5 trillion.
“Washington warned of the dangers of putting the will of a political party ahead of the will of the nation,” Manchin commented. “Washington warned against the accumulation of debt and encouraged us to ‘cherish public credit as a very important source of strength and security.’ And yet here we are today, watching party politics and out-of-control spending threaten the very foundation of our great nation.”
The comments come as the federal debt ceiling, an arbitrary cap on the national debt established by Congress, exceeded the statutory limit of nearly $31.4 trillion earlier this year, prompting Treasury Secretary Janet Yellen to <a href="https://www.dailywire.com/news/yellen-warns-congress-extraordinary-measures-have-begun-after-debt-ceiling-breached" target="_blank" rel="noopener">launch</a> “extraordinary measures” intended to fund the government through the early summer. President Joe Biden and House Speaker Kevin McCarthy (R-CA) are presently engaged in the early stages of negotiations to address the debt limit and decrease long-term spending; each have said that they will not consider reforms to Social Security and Medicare, raising <a href="https://www.dailywire.com/news/sparing-the-sacred-cow-republicans-and-democrats-refuse-to-touch-social-security-as-debt-crisis-looms" target="_blank" rel="noopener">questions</a> as to whether meaningful spending cuts will be possible since the two programs constitute nearly half of the federal budget.
Manchin, widely regarded as a centrist, noted that excessive federal spending has been a <a href="https://www.dailywire.com/news/national-debt-surpasses-31-trillion-for-the-first-time-republicans-and-democrats-both-to-blame" target="_blank" rel="noopener">problem</a> under Republican and Democratic administrations alike: former President Donald Trump added $7.5 trillion to projected debt levels through his legislative agenda and executive orders, while President Joe Biden has added $5 trillion to projected debt levels. Not considering the stimulus measures passed by both chief executives during the lockdown-induced recession implies an added debt burden of $4 trillion for the former and $2.5 trillion for the latter.
“My Democratic friends don’t want to say a word about our out-of-control spending and are outright refusing to even talk to Republicans about reasonable, responsible reforms. They want to pass a ‘clean’ debt ceiling bill without a commitment to fix anything,” Manchin continued. “My Republican friends refuse to offer any specifics, and some have recklessly threatened default, which is something that absolutely has to be off the table. We will never solve this problem by each party running in the opposite direction. We will only be able to change course by coming together, embracing common sense, and finding common ground.”
Manchin added that the government must get its “financial house in order” just like “every family has to do around their kitchen table” on a regular basis.
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“Our national debt weakens our economy, it weakens our national security, it weakens the trust Americans have in their government, and it weakens our role in the world. Fortunately, we still have time this year to prevent this catastrophic financial forecast,” he continued. “I am asking all of you to join me in calling for an honest budget, without the accounting gimmicks and tricks, a short-term deal to bring down our out of control spending right now, this year, and a plan to deal with our longer-term fiscal challenges.”

Joe Manchin

‘Party Politics And Out-Of-Control Spending’: Manchin Calls Out Both Republicans And Democrats For Worsening The National Debt

Manchin Rebukes Both Parties For Worsening The National Debt

Congress

Democrats

Republicans

<a href="https://www.dailywire.com/topic/congressional-budget-office-cbo" target="_blank" rel="noopener">Congressional Budget Office</a> Director Phillip Swagel revealed on Wednesday that the federal government could “run out of funds” between July and September.
The federal <a href="http://dailywire.com/topic/debt-ceiling" target="_blank" rel="noopener">debt ceiling</a>, an arbitrary cap on the <a href="http://dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a> established by Congress, exceeded the statutory limit of nearly $31.4 trillion last month, prompting Treasury Secretary Janet Yellen to <a href="https://www.dailywire.com/news/yellen-warns-congress-extraordinary-measures-have-begun-after-debt-ceiling-breached" target="_blank" rel="noopener">launch</a> “extraordinary measures” intended to continue funding the government through the month of June. Swagel, whose agency is tasked with providing analyses of budget and economic information to Congress, said in a <a href="https://www.cbo.gov/publication/58940" target="_blank" rel="noopener">statement</a> that lawmakers should address the debt limit before the government defaults on obligations.
“We project that, if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will be exhausted between July and September,” he said. “The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from our projections. In particular, income tax receipts in April could be more or less than we estimate.”
President Joe Biden and House Speaker Kevin McCarthy are presently engaged in negotiations to lower federal spending ahead of any changes to the debt ceiling. Republican lawmakers <a href="https://www.dailywire.com/news/here-are-the-concessions-house-speaker-kevin-mccarthy-gave-to-republican-holdouts-to-win-their-support" target="_blank" rel="noopener">struck a deal</a> with McCarthy under which the party’s new majority will introduce a budget that must refrain from increasing the debt limit in the name of fiscal responsibility.
“If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government would be unable to pay its obligations fully,” Swagel added. “As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both.”
Policymakers at the Federal Reserve have <a href="https://www.dailywire.com/news/federal-reserve-raises-target-interest-rates-by-quarter-point-marking-slowdown-of-aggressive-hikes" target="_blank" rel="noopener">increased</a> target federal funds rates substantially over the past several months, resulting in higher interest rates across the economy as central bankers attempt to quell inflationary pressures. Interest payments on the national debt are therefore slated to be larger than defense expenditures within the next five years, according to a <a href="https://www.dailywire.com/news/interest-payments-on-the-national-debt-on-pace-to-surpass-military-spending" target="_blank" rel="noopener">projection</a> from Moody’s Analytics.
The national debt currently exceeds $31.5 trillion. Swagel said “newly enacted legislation and changes to the economic forecast that boost interest costs and spending on mandatory programs” mean that the cumulative deficit between 2023 and 2032 is slated to increase by $3 trillion. “The increase in mandatory spending is driven by rising costs for Social Security and Medicare,” he continued. “As the cost of financing the nation’s debt grows, net outlays for interest increase substantially.”
Biden and McCarthy have nevertheless <a href="https://www.dailywire.com/news/sparing-the-sacred-cow-republicans-and-democrats-refuse-to-touch-social-security-as-debt-crisis-looms" target="_blank" rel="noopener">vowed</a> not to discuss amendments to Social Security and Medicare. The two programs marked 46% of the federal budget during the last fiscal year alongside other health initiatives, according to <a href="https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/" target="_blank" rel="noopener">data</a> from the Treasury Department. Both trust funds managed by Social Security are slated to be insolvent by 2035, according to a <a href="https://crsreports.congress.gov/product/pdf/RL/RL33514" target="_blank" rel="noopener">report</a> from the Congressional Research Service. The agency recommended increasing payroll taxes or reducing payouts to avoid an automatic reduction for all recipients.
Biden <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/02/07/remarks-of-president-joe-biden-state-of-the-union-address-as-prepared-for-delivery/" target="_blank" rel="noopener">claimed</a> during his most recent State of the Union address that he oversaw “the largest deficit reduction” in the nation’s history during his first two years in office. Although he presided over a decline in the deficit from $3.1 trillion in fiscal year 2020 to $1.4 trillion in fiscal year 2022, according to <a href="https://fred.stlouisfed.org/series/FYFSD" target="_blank" rel="noopener">data</a> from the Office of Management and Budget, he failed to mention that the record spending occurred due to legislation passed in response to the lockdown-induced recession. The deficit last year still exceeded those witnessed in the years before the crisis.

The U.S. Treasury Building

Congressional Budget Office Reveals When Government Will Run Out Of Cash

Government Will Run Out Of Cash Sometime This Summer Or Fall

Congressional Budget Office (CBO)

Treasury Department

Democrats and their lapdog media allies <a href="https://www.dailywire.com/news/white-house-takes-adversarial-posture-toward-mccarthy-ahead-of-budget-cut-meeting-heres-what-they-want-him-to-do" target="_blank" rel="noopener">want the American people</a> to believe that Speaker of the House <a href="https://www.dailywire.com/topic/kevin-mccarthy" target="_blank" rel="noopener">Kevin McCarthy</a> (R-CA) is fiscally irresponsible. Why? Well, he wants the federal government to adopt a little bit of fiscal responsibility and cut some spending before raising the debt ceiling.
If that makes no sense to you, it&#8217;s because you&#8217;re one smart cookie and filled with common sense. If that sounds right and good, you just might be a leftist.
On Wednesday, McCarthy is meeting with Biden to begin talks about whether the U.S. raises its debt limit. This sort of thing has happened dozens of times since the inception of the debt limit.
The first debt ceiling was <a href="https://www.cfr.org/backgrounder/what-happens-when-us-hits-its-debt-ceiling" target="_blank" rel="noopener">crafted</a> by the legislative branch in 1917 and was intended to slow the roll of accumulating debt. It does so by setting a limit on how the U.S. can borrow. Since that time, America has run the tab up by a whopping $31 trillion. Both Republicans and Democrats are guilty of deficit spending — meaning the government is taking in less money than it&#8217;s spending. The debt ceiling can be raised to avoid defaulting.
Leftists look at that and say, &#8220;Well, let&#8217;s just keep spending and raise taxes. Problem solved!&#8221; The GOP tends to look at it and say, &#8220;Let&#8217;s cut spending and cut taxes as well.&#8221; Republicans have been great at cutting taxes, but haven&#8217;t fared so well at limiting spending — arguably due to their historical support of the Department of Defense, no questions asked.
Now, McCarthy says he has a plan to craft a balanced budget. Part of that plan seems to include targeting woke nonsense such as diversity, equity, and inclusion trainings, as well LGBTQ nonsense in the military. So, he does want to cut DOD spending — he just wants to be smart about it.
“I’ve got a big plan. The first question is does the president want to continue reckless spending or find a way that we can be responsible. Sit down and find common ground where we put ourselves on a path to budget. Make a balanced budget,” he <a href="https://twitter.com/mkraju/status/1620874814889267200" target="_blank" rel="noopener">said</a> on Wednesday.
In January, McCarthy also <a href="https://thehill.com/homenews/house/3814551-mccarthy-weighs-in-on-defense-spending-cuts-amid-gop-divisions/" target="_blank" rel="noopener">shot back at his political opponents</a>, &#8220;Why would we sit back and be so arrogant to say no, there’s no waste in government?”
“Why wouldn’t we look at all the money that poured out during COVID? What money of that has not been spent? Why wouldn’t you pull that back yet?&#8221; he pondered.
That question hasn&#8217;t been answered. In fact, Biden isn&#8217;t <a href="https://www.usatoday.com/story/news/politics/2023/01/31/debt-ceiling-talks-biden-reaffirms-he-not-negotiate-gop/11126412002/" target="_blank" rel="noopener">offering</a> any response to McCarthy. He is maintaining that the White House will not negotiate on spending cuts whatsoever.
So what happens now? Well, the U.S. actually hit the debt ceiling in January. Since January 19, the Treasury Department has implemented what it calls &#8220;extraordinary measures,&#8221; which include <a href="https://home.treasury.gov/news/press-releases/jy1196" target="_blank" rel="noopener">not funding certain aspects</a> of the U.S. government, such as a &#8220;portion of the Civil Service Retirement and Disability Fund.&#8221;
That will buy the U.S. some time until June before it defaults. If the U.S. were to actually fail to raise the debt ceiling, there could be disastrous consequences for the economy, as well as our credit rating.
So, Biden posits that Congress owes it to the nation and to the world, essentially, to raise the debt limit. That begs the question, what&#8217;s the point of even having the debt ceiling anyway?
Perhaps it&#8217;s best to look at this another way, using a metaphor of sorts.
Let&#8217;s say your mom had a dieting idea for maintaining her weight in a healthy manner. To help keep track, she wore a belt and swore she would make changes if it ever became too tight.
But then as she accumulated mass and her pants became uncomfortable — rather than kicking into Keto ASAP and adopting some intermittent fasting measures — she just decided to loosen the belt a few notches. Let&#8217;s say she did that repeatedly until she ballooned so much that &#8220;yo momma&#8221; got so fat that when she went into the ocean, whales came up her to her and started singing, &#8220;We are family!&#8221;
Wouldn&#8217;t you say that that belt is pretty pointless? As a good daughter or son, wouldn&#8217;t you at least try to get your mom to change her lifestyle?
And so it is the same with the U.S. debt limit and McCarthy. He at least has to try to get the U.S. to spend its money more wisely. It&#8217;s unlikely the U.S. will default on its debt. That would be a political nightmare for McCarthy.
He promised voters, as did the House Freedom caucus that won him the speakership, to stop reckless spending. He owes it to his voters.
So, what&#8217;s the simplest solution that McCarthy and Biden need to negotiate?
Well, according to the president of the Heritage Foundation, Kevin Roberts, &#8220;There has to be, first and foremost, a dollar-for-dollar correspondence between whatever dollar amount is added to the debt ceiling with spending cuts.&#8221;
Whether McCarthy can actually secure that with a Democratic president remains to be seen, but it&#8217;s looney to claim that somehow he&#8217;s being unwise to demand the U.S. start cutting out wasteful fat in the U.S. budget.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.

Kevin McCarthy, Joe Biden

Democrat Logic: McCarthy Is Fiscally Irresponsible For Demanding Fiscal Responsibility In Debt Ceiling Debate

<a href="http://dailywire.com/topic/biden-administration" target="_blank" rel="noopener">White House</a> officials took an adversarial posture toward House Speaker <a href="http://dailywire.com/topic/kevin-mccarthy" target="_blank" rel="noopener">Kevin McCarthy</a> (R-CA) ahead of his Wednesday meeting with President <a href="http://dailywire.com/topic/joe-biden" target="_blank" rel="noopener">Joe Biden</a> about the <a href="http://dailywire.com/topic/debt-ceiling" target="_blank" rel="noopener">debt ceiling</a> and possible spending cuts.
The two officials are slated to meet after the debt ceiling, an arbitrary cap on the <a href="http://dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a> established by Congress, exceeded its statutory limit, provoking renewed calls among <a href="http://dailywire.com/topic/house-republicans" target="_blank" rel="noopener">House Republicans</a> to balance the budget. National Economic Council Director Brian Deese and Office of Management and Budget Director Shalanda Young said in a <a href="https://admin.govexec.com/media/gbc/docs/pdfs_edit/013123mccarthyletter.pdf" target="_blank" rel="noopener">memorandum</a> that Biden would ask McCarthy whether he will commit to preventing a default on the national debt.
“As the President has said many times, the United States must never default on its financial obligations,” the memo said. “Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos. Speaker McCarthy’s unwillingness to-date to taking the threat of default off the table makes him an outlier, including among current and former leaders of his own party.”
McCarthy repeated multiple times during a Sunday <a href="https://www.dailywire.com/news/reforming-social-security-and-medicare-off-the-table-in-debt-negotiations-mccarthy-says" target="_blank" rel="noopener">interview</a> with CBS News that the federal government would not default on obligations. The memo nevertheless cited statements from Senate Minority Leader Mitch McConnell (R-KY) indicating his refusal to allow a debt default, as well as past statements from President Donald Trump and President Ronald Reagan in which they committed to preserve the nation’s high credit rating.
Biden will also press McCarthy on when Republicans will release their budget proposals. The memo implied that the budget would include reductions to Social Security and Medicare, as well as “cuts to research, education, and public safety,” even though McCarthy stressed during the CBS News interview that Social Security and Medicare would remain “off the table” in the negotiations. The memo was dated January 30, which was one day after the interview.
“On March 9, President Biden will release his budget. The budget will show how the President plans to invest in America, continue to lower costs for families, protect and strengthen Social Security and Medicare, and reduce the deficit with tables and numbers showing exactly how his economic and fiscal policies add up to achieve these goals,” the memo continued. “Speaker McCarthy has said that reducing the deficit is a top priority for him and his Caucus. So far, however, House Republicans have offered up detailed plans to increase the deficit with tax policies that would benefit the wealthiest Americans.”
The refusal from both Biden and McCarthy to address Social Security and Medicare has <a href="https://www.dailywire.com/news/sparing-the-sacred-cow-republicans-and-democrats-refuse-to-touch-social-security-as-debt-crisis-looms" target="_blank" rel="noopener">raised questions</a> regarding whether meaningful spending reductions will be possible. The two programs constituted 46% of the federal budget during the last fiscal year alongside other health initiatives, according to <a href="https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/" target="_blank" rel="noopener">data</a> from the Treasury Department.
Social Security has long been considered the third rail of American politics: the vast majority of citizens have historically indicated that they want benefits from the program retained with no reductions, even as nearly half are concerned about continued funding for the program, according to <a href="https://news.gallup.com/opinion/polling-matters/258335/social-security-american-public-opinion.aspx" target="_blank" rel="noopener">data</a> from Gallup. In order to balance the budget while exempting defense, veteran benefits, Social Security, and Medicare from cuts, all other federal spending would have to be reduced 85%, according to an <a href="https://www.dailywire.com/news/federal-spending-must-be-cut-26-to-balance-budget-even-more-to-keep-core-social-defense-programs-intact-analysis" target="_blank" rel="noopener">analysis</a> from the Committee for a Responsible Federal Budget.

White House Takes Adversarial Posture Toward McCarthy Ahead Of Budget Cut Meeting. Here’s What They Want Him To Do.

White House Takes Adversarial Posture Toward McCarthy Ahead Of Budget Cut Meeting

Executive

<a href="https://www.dailywire.com/topic/republican-party" target="_blank" rel="noopener">Republican</a> and <a href="https://www.dailywire.com/topic/democratic-party" target="_blank" rel="noopener">Democratic</a> officials preparing to negotiate spending reductions have expressed an unmitigated refusal to involve <a href="http://dailywire.com/topic/social-security" target="_blank" rel="noopener">Social Security</a> in the conversation.
President <a href="http://dailywire.com/topic/joe-biden" target="_blank" rel="noopener">Joe Biden</a> and House Speaker <a href="http://dailywire.com/topic/kevin-mccarthy" target="_blank" rel="noopener">Kevin McCarthy</a> (R-CA) are slated to meet on Wednesday after the <a href="http://dailywire.com/topic/debt-ceiling" target="_blank" rel="noopener">debt ceiling</a>, an arbitrary cap on the <a href="http://dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a> established by Congress, exceeded the statutory limit of nearly $31.4 trillion. The White House has asserted that lawmakers on the other side of the aisle are attempting to reduce benefits from Social Security, the retirement, disability, and survivor benefit program established during the Great Depression, as well as Medicare, which provides health insurance to older Americans.
“You paid for your Social Security. Every single paycheck from the time you started working,” Biden <a href="https://twitter.com/JoeBiden/status/1619495290284740609" target="_blank" rel="noopener">said</a> on social media. “If Republicans try to cut it, I will veto it.”
McCarthy has meanwhile balked at the suggestion and affirmed that Republicans have no desire to discuss the programs in the forthcoming negotiations. “Let’s take those off the table,” he said in a recent <a href="https://www.dailywire.com/news/reforming-social-security-and-medicare-off-the-table-in-debt-negotiations-mccarthy-says" target="_blank" rel="noopener">interview</a>. “If you read our Commitment to America, all we talk about is strengthening Medicare and Social Security.”
Social Security, Medicare, and other health initiatives constituted 46% of the federal budget during the last fiscal year, according to <a href="https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/" target="_blank" rel="noopener">data</a> from the Treasury Department. In order to balance the budget while exempting defense, veteran benefits, Social Security, and Medicare from cuts, all other federal spending would have to be reduced 85%, according to an <a href="https://www.dailywire.com/news/federal-spending-must-be-cut-26-to-balance-budget-even-more-to-keep-core-social-defense-programs-intact-analysis" target="_blank" rel="noopener">analysis</a> from the Committee for a Responsible Federal Budget.
Tax Foundation Senior Economist Erica York confirmed to The Daily Wire that leaving the two programs untouched would not be possible if officials are serious about restoring fiscal sanity. “If reforms to Social Security and Medicare and raising new revenues are all completely off the table,” she commented, “balancing the budget within the next ten years is an unrealistic goal because it could only be achieved by making infeasibly large cuts to other spending programs.”
Social Security has long been considered the third rail of American politics: the vast majority of survey respondents have historically indicated that they want benefits from the program retained with no reductions, even as nearly half are concerned about continued funding for the program, according to an <a href="https://news.gallup.com/opinion/polling-matters/258335/social-security-american-public-opinion.aspx" target="_blank" rel="noopener">analysis</a> from Gallup.
Both trust funds managed by Social Security are nevertheless slated to be insolvent by 2035, according to a <a href="https://crsreports.congress.gov/product/pdf/RL/RL33514" target="_blank" rel="noopener">report</a> from the Congressional Research Service. The agency recommended increasing payroll taxes or reducing payouts to avoid a benefit reduction; though the two major parties have floated both courses of action in recent decades, the remarks from Biden and McCarthy indicate that a compromise on Social Security reforms will not even be considered.
“Typically, we’ve seen Democratic proposals focus on increasing the payroll tax for solvency,” York continued, “and Republican proposals focus on the spending side for solvency, such as increasing the retirement age or curbing benefits for high-income earners.”
Republican and Democratic administrations have maintained unsustainable budget deficits and inflated the national debt to more than $31.5 trillion. President Barack Obama, President Donald Trump, and President Joe Biden have each witnessed deficits nearing or surpassing $1 trillion, according to <a href="https://fred.stlouisfed.org/series/FYFSD" target="_blank" rel="noopener">data</a> from the Office of Management and Budget, even during fiscal years that were not affected by stimulus measures intended to address the 2008 financial crisis and the 2020 lockdown-induced recession.

House Minority Leader Kevin McCarthy and Republican Conference Press Conference

Sparing The Sacred Cow: Republicans And Democrats Refuse To Touch Social Security As Debt Crisis Looms

Republicans And Democrats Refuse To Touch Social Security As Debt Crisis Looms

Democratic Party

General

Republican Party

Social Security

House Speaker <a href="http://dailywire.com/topic/kevin-mccarthy" target="_blank" rel="noopener">Kevin McCarthy</a> (R-CA) said that spending cuts to <a href="http://dailywire.com/topic/social-security" target="_blank" rel="noopener">Social Security</a> and <a href="http://dailywire.com/topic/medicare" target="_blank" rel="noopener">Medicare</a> are “off the table” as lawmakers seek to fund the government while reducing deficits.
McCarthy plans to meet with President <a href="http://dailywire.com/topic/biden-administration" target="_blank" rel="noopener">Joe Biden</a> on Wednesday to discuss possible budget cuts after the <a href="http://dailywire.com/topic/debt-ceiling" target="_blank" rel="noopener">debt ceiling</a>, an arbitrary cap on the <a href="http://dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a> established by Congress, exceeded the statutory limit of nearly $31.4 trillion. The lawmaker said multiple times during an <a href="https://www.youtube.com/watch?v=e8FaXFR0jRg" target="_blank" rel="noopener">interview</a> with CBS senior foreign affairs correspondent Margaret Brennan on Sunday that Republicans would not offer to reduce allocations for Social Security and Medicare.
“Let’s take those off the table,” McCarthy said when asked about the programs. “If you read our Commitment to America, all we talk about is strengthening Medicare and Social Security.”
Social Security, Medicare, and other health initiatives constituted 46% of the federal budget during the last fiscal year, according to <a href="https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/" target="_blank" rel="noopener">data</a> from the Treasury Department. In order to balance the budget while exempting defense, veteran benefits, Social Security, and Medicare from cuts, all other federal spending would have to be reduced 85%, according to an <a href="https://www.dailywire.com/news/federal-spending-must-be-cut-26-to-balance-budget-even-more-to-keep-core-social-defense-programs-intact-analysis" target="_blank" rel="noopener">analysis</a> from the Committee for a Responsible Federal Budget.
McCarthy, who presides over a narrow majority in the House of Representatives, expressed a willingness to examine defense programs for unnecessary waste. “I want to make sure we’re protected in our defense spending, but I want to make sure it’s effective and efficient. I want to look at every single dollar we’re spending, no matter where it’s being spent. I want to eliminate waste wherever it is,” he continued. “Like every single household, like every single state, we shouldn’t just print more money. We should balance our budget.”
Keeping veteran and defense spending intact would require 33% spending reductions for all other federal programs, including Social Security and Medicare, according to the Committee for a Responsible Federal Budget. The average annual benefit for a new retiree would thus decrease by $13,000, while as many as 25 million recipients of Medicare would lose eligibility.
Treasury Secretary Janet Yellen <a href="https://www.dailywire.com/news/very-irresponsible-yellen-blasts-house-republicans-for-wanting-spending-cuts-amid-debt-showdown" target="_blank" rel="noopener">warned</a> lawmakers that the “extraordinary measures” adopted by her agency to keep the government solvent will last only until June. Brennan pressed McCarthy on whether he would commit to avoiding a default on obligations at all costs.
“We have hundreds of billions of dollars. This won’t come to fruition until some time this June. So the responsible thing to do is sit down like two adults and start having that discussion. Unfortunately the White House was saying before that they wouldn’t even talk. I’m thankful that we’re meeting on Wednesday, but that’s exactly what we should be doing,” McCarthy responded. “What has happened with the debt limit is we’ve reached our credit card limit. Should we just continue to raise the limit, or should we look at what we’re spending?”
Republican lawmakers <a href="https://www.dailywire.com/news/here-are-the-concessions-house-speaker-kevin-mccarthy-gave-to-republican-holdouts-to-win-their-support" target="_blank" rel="noopener">struck a deal</a> with McCarthy under which the party’s new majority will introduce a budget that refrains from increasing the debt ceiling. The national debt exceeded $31.5 trillion even as <a href="https://www.dailywire.com/news/interest-payments-on-the-national-debt-on-pace-to-surpass-military-spending" target="_blank" rel="noopener">maintenance costs</a> soar due to a higher interest rate environment. An <a href="https://www.dailywire.com/news/government-must-raise-taxes-40-or-cut-spending-30-to-achieve-fiscal-balance-study" target="_blank" rel="noopener">analysis</a> from economists at the University of Pennsylvania’s Wharton School recently found that a 30% decrease in spending or a 40% increase in taxation would be necessary to handle current spending and future obligations.

Reforming Social Security And Medicare ‘Off The Table’ In Debt Negotiations, McCarthy Says

Social Security And Medicare Cuts 'Off The Table' In Debt Negotiations

Medicare

U.S.

House Speaker Kevin McCarthy (R-CA) slammed Senate Majority Leader Chuck Schumer (D-NY) and President Joe Biden on Sunday, accusing them of not wanting to eliminate waste from the Democrats’ massive omnibus bill.
McCarthy made the remarks during an appearance on CBS News’s “Face The Nation” with Margaret Brennan while discussing raising the debt ceiling.
“The responsible thing to do is sit down like two adults and start having that discussion,” McCarthy said. “What has happened with the debt limit is you reached your credit card limit. Should we just continue to raise the limit? Or should we look at what we&#8217;re spending?”
When Brennan claimed it was about paying off past commitments, McCarthy responded, “No, no. Chuck Schumer never passed a budget since he&#8217;s been leading. He&#8217;s never passed an appropriation bill. Those are the most basic things that Congress should do.”
“The only person who is getting in the way right now, is the president and Schumer,” McCarthy said. “They won&#8217;t even pass a budget. They won&#8217;t even negotiate. We have now til June. I want to make sure we have something responsible, something that we can move forward on and something that we can balance our debt with.”
“That&#8217;s exactly what I&#8217;ve been asking for,” he concluded. “The only one who&#8217;s playing with the markets right now is the president to have the idea that he wouldn&#8217;t talk. Did the president really believe and really all your viewers, do you believe there&#8217;s no waste in government? Do you believe there was no waste in that $1.7 trillion? That&#8217;s what we were spending just four weeks ago. So I think the rational position here is sit down, eliminate the waste and put us on a path to balance.”
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">
&quot;We&#39;re not going to default,&quot; <a href="https://twitter.com/SpeakerMcCarthy?ref_src=twsrc%5Etfw">@SpeakerMcCarthy</a> tells <a href="https://twitter.com/margbrennan?ref_src=twsrc%5Etfw">@margbrennan</a> when asked if he will guarantee that the U.S. does not default on his watch, but McCarthy does not indicate whether he supports a short-term debt limit extension to September. <a href="https://t.co/iIWLKJxJMl">pic.twitter.com/iIWLKJxJMl</a>
&mdash; Face The Nation (@FaceTheNation) <a href="https://twitter.com/FaceTheNation/status/1619736486768689155?ref_src=twsrc%5Etfw">January 29, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

McCarthy Shreds Top Democrats Over Omnibus: They’re Saying There’s ‘No Waste In Government’ Spending

McCarthy Shreds Top Democrats Over Omnibus: They're Saying There's ‘No Waste In Government’ Spending

Rep. <a href="https://www.dailywire.com/topic/alexandria-ocasio-cortez" target="_blank" rel="noopener">Alexandria Ocasio-Cortez</a> (D-NY) claimed that the <a href="http://dailywire.com/topic/taxes" target="_blank" rel="noopener">tax</a> cuts passed under former President <a href="http://dailywire.com/topic/donald-trump" target="_blank" rel="noopener">Donald Trump</a> have been the “largest contributor” to federal budget deficits over the past few years rather than the spending agenda enacted by President <a href="http://dailywire.com/topic/joe-biden" target="_blank" rel="noopener">Joe Biden</a>.
Treasury Secretary Janet Yellen recently <a href="https://www.dailywire.com/news/yellen-warns-congress-extraordinary-measures-have-begun-after-debt-ceiling-breached" target="_blank" rel="noopener">informed</a> House Speaker Kevin McCarthy (R-CA) and other lawmakers in a <a href="https://home.treasury.gov/news/press-releases/jy1196" target="_blank" rel="noopener">letter</a> that the debt ceiling, an arbitrary cap on the <a href="http://dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a> established by Congress, exceeded the statutory limit of nearly $31.4 trillion, starting a debate on the future of federal deficit spending. Ocasio-Cortez was <a href="https://www.youtube.com/watch?v=dOgIGpGG7AM" target="_blank" rel="noopener">pressed</a> by a journalist on Thursday to discuss whether she believes her own party is culpable for recent record deficits.
“Democrats have been in charge for the past two years; do you think Democrats have spent too much money?” the reporter asked. “I think the largest contributor to the debt ceiling, to our deficit, has been the Trump tax cuts,” the lawmaker responded.
The Tax Cuts and Jobs Act, which constitutes the most significant legislative accomplishment of the Trump administration, is projected to decrease federal revenues by $1.9 trillion between 2018 and 2028, according to an <a href="https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/53651-outlook-appendixb.pdf" target="_blank" rel="noopener">analysis</a> from the Congressional Budget Office. On the other hand, spending packages approved by Biden will contribute more than $4.8 trillion in new deficit spending between 2021 and 2031, according to an <a href="https://www.crfb.org/blogs/biden-administration-has-approved-48-trillion-new-borrowing" target="_blank" rel="noopener">analysis</a> from the Committee for a Responsible Federal Budget, exceeding the $1.9 trillion added by the Tax Cuts and Jobs Act. Removing the effect of the American Rescue Plan implies $2.5 trillion of new deficits.
Trump presided over federal budget deficits ranging between $665 billion and $984 billion ahead of the lockdown-induced recession, during which the deficit rose to $3.1 trillion in fiscal year 2020 as a result of stimulus measures such as the CARES Act, according to <a href="https://fred.stlouisfed.org/series/FYFSD" target="_blank" rel="noopener">data</a> from the Office of Management and Budget. Biden oversaw a $2.8 trillion deficit in fiscal year 2021, largely due to the passage of his American Rescue Plan. Though the commander-in-chief has repeatedly <a href="https://www.dailywire.com/news/biden-calls-gop-fiscally-demented-here-are-some-facts" target="_blank" rel="noopener">asserted</a> that he has successfully reduced the budget deficit, the shortfall of $1.4 trillion in fiscal year 2022 significantly exceeds the deficits witnessed before the recession.
Ocasio-Cortez has previously received criticism for proposing ambitious legislation that would require significant federal expenditures. The first iteration of her Green New Deal would have <a href="https://www.bloomberg.com/news/articles/2019-02-25/group-sees-ocasio-cortez-s-green-new-deal-costing-93-trillion?leadSource=uverify%20wall" target="_blank" rel="noopener">cost</a> between $51 trillion and $93 trillion over the course of a single decade.
More broadly, however, both Republican and Democratic administrations have maintained unsustainable budget deficits and inflated the national debt to more than $31.5 trillion. The most recent breach of the debt ceiling comes after Republican lawmakers <a href="https://www.dailywire.com/news/here-are-the-concessions-house-speaker-kevin-mccarthy-gave-to-republican-holdouts-to-win-their-support" target="_blank" rel="noopener">struck a deal</a> with McCarthy under which the party’s new majority vowed to introduce a budget that refrains from increasing the statutory debt limit.
A recent <a href="https://www.dailywire.com/news/government-must-raise-taxes-40-or-cut-spending-30-to-achieve-fiscal-balance-study" target="_blank" rel="noopener">analysis</a> from economists at the University of Pennsylvania’s Wharton School revealed that a 30% decrease in spending or a 40% increase in taxation would be necessary to handle current deficit spending and future obligations. A similar <a href="https://www.dailywire.com/news/federal-spending-must-be-cut-26-to-balance-budget-even-more-to-keep-core-social-defense-programs-intact-analysis" target="_blank" rel="noopener">study</a> from the Committee for a Responsible Federal Budget found that policymakers must enact 26% across-the-board spending cuts in order to balance the budget within the next decade; in order to balance the budget while exempting programs such as defense, veteran benefits, Social Security, and Medicare from cuts, all other federal spending would have to be reduced 85%.

AOC Tries To Blame Trump Tax Cuts, Not Runaway Spending, For Massive Deficits

Alexandria Ocasio-Cortez

Donald Trump

West Virginia Democratic Sen. <a href="https://www.dailywire.com/topic/joe-manchin" target="_blank" rel="noopener">Joe Manchin</a> called on his fellow Democrats to negotiate with the Republican House majority over the <a href="https://www.dailywire.com/topic/debt-ceiling" target="_blank" rel="noopener">debt ceiling</a>.
In consecutive appearances on NBC&#8217;s &#8220;<a href="https://www.nbcnews.com/meet-the-press/video/full-manchin-there-s-nothing-that-holds-lawmakers-accountable-161147461939" target="_blank" rel="noopener">Meet the Press</a>&#8221; and CNN&#8217;s &#8220;<a href="https://www.cnn.com/videos/politics/2023/01/22/manchin-full.cnn" target="_blank" rel="noopener">State of the Union</a>&#8221; Sunday, Manchin called out members of his own party who are refusing to negotiate with GOP leaders. Manchin said the debt ceiling fight presents an opportunity to address the dysfunction around the federal budget process and make changes.
&#8220;I think it&#8217;s a mistake,&#8221; Manchin said on CNN of the Biden administration&#8217;s refusal to negotiate. &#8220;This is a democracy that we have. We have a two-party system. And we should be able to talk and find out where our differences are. And if they are irreconcilable, then you have to move on from there and let the people make their decisions.&#8221;
Manchin also blasted Senate Majority Whip Dick Durbin (D-IL), who said Biden should not negotiate.
&#8220;We just respectfully disagree,&#8221; Manchin said. &#8220;[E]very American has to live within a budget. If they don&#8217;t, they&#8217;re in trouble financially. Every business that is successful has to live within a budget. Every state has to live within a budget. Shouldn&#8217;t the federal government have some guardrails that say, &#8216;hey, guys, you&#8217;re getting over &#8212; you&#8217;re overreaching here and you&#8217;re overspending?'&#8221;
During his appearance on Meet the Press, Manchin pointed out that for his entire tenure in the Senate, the budget process has been broken.
&#8220;I&#8217;ve been here 12 years,&#8221; he said. &#8220;We haven’t had a budget yet.&#8221;
&#8220;There&#8217;s nothing that holds us accountable,&#8221; he continued. &#8220;Nothing at all. We can say, &#8216;oh, we&#8217;re gonna do it,&#8217; but as I&#8217;ve said before, 12 years, we haven&#8217;t had a budget. That&#8217;s ridiculous.&#8221;
&#8220;The process isn&#8217;t working,&#8221; he went on. &#8220;How come we&#8217;re not held accountable to have the appropriations bills done at a certain time before the end of the fiscal year&#8230; you know what happens, it rolls over into an omnibus bill at the end, everything&#8217;s thrown into it and, &#8216;Okay here. We got it guys. Thats it.&#8217; It makes no sense.&#8221;
Manchin said that the debt ceiling increase would pass anyway because Congress could not risk the financial standing of the dollar.
&#8220;With that being said, how do you get to it, how do you use this moment to get to responsibility?&#8221; said Manchin, pointing out that interest payments on the debt almost match the U.S. defense budget.

Manchin Says Dems Should Negotiate With GOP On Debt Ceiling, Use Opportunity To Fix The Budget Process

Manchin Says Dems Should Negotiate With GOP, Debt Ceiling Fight Is An Opportunity To Fix The Budget Process

Meet the Press

State of the Union

<a href="http://dailywire.com/topic/treasury-department" target="_blank" rel="noopener">Treasury</a> Secretary <a href="http://dailywire.com/topic/janet-yellen" target="_blank" rel="noopener">Janet Yellen</a> asserted on Saturday that <a href="http://dailywire.com/topic/house-republicans" target="_blank" rel="noopener">House Republicans</a> attempting to negotiate spending cuts amid the renewed <a href="http://dailywire.com/topic/debt-ceiling" target="_blank" rel="noopener">debt ceiling</a> battle are “very irresponsible.”
The official <a href="https://www.dailywire.com/news/yellen-warns-congress-extraordinary-measures-have-begun-after-debt-ceiling-breached" target="_blank" rel="noopener">informed</a> House Speaker Kevin McCarthy (R-CA) and other lawmakers in a recent <a href="https://home.treasury.gov/news/press-releases/jy1196" target="_blank" rel="noopener">letter</a> that the debt ceiling, an arbitrary cap on the <a href="http://dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a> established by Congress, exceeded the statutory limit of nearly $31.4 trillion as of this week. Yellen said in an <a href="https://apnews.com/article/politics-us-department-of-the-treasury-united-states-government-district-columbia-china-0f7f0d85ed38353940a18cd262de8b09?utm_source=homepage&amp;utm_medium=TopNews&amp;utm_campaign=position_01" target="_blank" rel="noopener">interview</a> with the Associated Press that House Republicans calling for spending cuts are risking a “self-imposed calamity in the United States and the world economy.”
“This is about paying bills that have already been incurred by decisions with this and past Congresses and it’s not about new spending,” she said, commenting that sustainable expenditures cannot be “negotiated over whether or not we’re going to pay our bills.”
Yellen, who is currently touring multiple African countries for a trip centered on the continent’s economic development, said that the position of withholding a debt ceiling hike until more spending cuts occur is “a very irresponsible thing to do” and added the position could have serious consequences even before “the day of reckoning.” Her letter to lawmakers said that new investments into the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund have been tentatively suspended; the “extraordinary measures” adopted by the Treasury Department to keep the government solvent are expected to last until June.
Yellen nevertheless forecasts that lawmakers will defuse the situation because they understand the economic calamity that would be spurred by the federal government defaulting on obligations. Beyond the possibility of a default, diminished trust in the government’s ability to repay debt can also cause “markets to become quite concerned,” she continued.
The federal government has relied upon sizable budget deficits over the past several decades to continue deficit-driven expenditures. Social Security, Medicare, and other health initiatives constituted 46% of the federal budget during the last fiscal year, according to <a href="https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/" target="_blank" rel="noopener">data</a> from the Treasury Department, even as <a href="https://www.dailywire.com/news/interest-payments-on-the-national-debt-on-pace-to-surpass-military-spending" target="_blank" rel="noopener">maintenance costs</a> on the national debt soar due to the present rise in interest rates across the economy.
Yellen, who previously directed the Federal Reserve, said in another <a href="https://home.treasury.gov/news/press-releases/jy1188" target="_blank" rel="noopener">notice</a> last week that “failure to meet the government’s obligations” would mean “irreparable harm” to the domestic economy and the global financial system. “Presidents and Treasury Secretaries of both parties have made clear that the government must not default on any obligation of the United States,” she wrote. “Yet the use of extraordinary measures enables the government to meet its obligations for only a limited amount of time.”
As McCarthy plans to meet with President Joe Biden to discuss the debt ceiling negotiations, House Republicans have called upon their Democratic counterparts to determine possibilities for spending cuts. Ways and Means Committee Chairman Jason Smith (R-MO) remarked in a <a href="https://waysandmeans.house.gov/smith-democrats-need-to-come-to-the-table-to-address-reckless-spending-and-debt-limit/" target="_blank" rel="noopener">statement</a> that “reckless spending” has produced “the worst spike in prices in forty years” and resultant decreases in living standards.
“Instead of attacking his political opponents, President Biden should be spending this time working with House Republicans to address the debt ceiling in a way that imposes some fiscal sanity. Otherwise, the President is simply scheduling America’s next debt crisis,” he continued. “We can find commonsense solutions to halt reckless spending, put American’s finances on stable footing, and ensure we meet our debt obligations.”

Janet Yellen

‘Very Irresponsible’: Yellen Blasts House Republicans For Wanting Spending Cuts Amid Debt Showdown

Yellen Calls Republicans 'Very Irresponsible' For Wanting Deficit Reductions

Calls for the creation of a trillion-dollar platinum coin to help the United States avoid defaulting on the <a href="https://www.dailywire.com/topic/national-debt" target="_blank" rel="noopener">national debt</a> have resurfaced as the latest <a href="https://www.dailywire.com/topic/debt-ceiling" target="_blank" rel="noopener">debt ceiling</a> battle starts on Capitol Hill.
Treasury Secretary Janet Yellen <a href="https://www.dailywire.com/news/yellen-warns-congress-extraordinary-measures-have-begun-after-debt-ceiling-breached" target="_blank" rel="noopener">notified</a> House Speaker Kevin McCarthy (R-CA) and other lawmakers in a <a href="https://home.treasury.gov/news/press-releases/jy1196" target="_blank" rel="noopener">letter</a> that the debt ceiling, an arbitrary cap on the national debt established by Congress, crossed the statutory limit of nearly $31.4 trillion as of Thursday. As House Republicans and the Biden administration launch negotiations to determine potential budget cuts, some Left-wing economists reintroduced calls to mint a trillion-dollar coin to resolve the debt crisis.
Nathan Tankus, a leading proponent of the idea, asserted in an <a href="https://www.ft.com/content/3e9d6924-42af-4892-951e-dee36a020ea7">article</a> for the Financial Times that the core objection to the move is the concern that policymakers at the Federal Reserve will not accept its validity. “The coin, having already been issued, would be legal tender, and the Fed would have no basis for refusing it,” he countered. “Even so, I don’t think the Fed would force the Treasury to seek alternatives. So the Biden administration should call the Fed’s bluff.”
Washington Post economics reporter Jeff Stein recently <a href="https://twitter.com/JStein_WaPo/status/1616415245605502977?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1616415245605502977%7Ctwgr%5E0a0a3e830742c7bcb9e8a0868103ea8e0a77b38e%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.nationalreview.com%2Fcorner%2Fignore-scotus-and-send-troops-to-the-fed-mint-the-coin-activists-get-unhinged%2F" target="_blank" rel="noopener">asked</a> Tankus and Rohan Grey, an assistant law professor at Willamette University who also supports minting the coin, how they would respond to the Supreme Court striking down the idea. Grey responded by suggesting that policymakers could merely “ignore” the Supreme Court and “send troops” to ensure that the Federal Reserve accepts the currency.
Supporters of the plan claim that a <a href="https://www.law.cornell.edu/uscode/text/31/5112" target="_blank" rel="noopener">law</a> permitting the Treasury Secretary to “mint and issue platinum bullion coins and proof platinum coins” does not include an upper limit on a given coin’s denomination. Treasury officials would merely mint a trillion-dollar platinum coin under the plan and deliver the currency for deposit at the Federal Reserve.
Detractors for the theory meanwhile contend that the trillion-dollar coin would worsen inflation readings, which are currently near their highest levels in four decades.
The prospect of a trillion-dollar coin is by no means completely novel. Former President Barack Obama explained in a 2017 <a href="https://www.businessinsider.com/obama-mint-trillion-dollar-coin-scariest-night-debt-ceiling-2017-1" target="_blank" rel="noopener">interview</a> with Pod Save America that his advisers briefly considered minting the coin amid debate over the 2013 debt crisis. “There was this theory that I had the authority to issue through the mint this massive trillion-dollar coin and on that basis, we could try to pay off U.S. Treasurys,” he remarked. “It was a very realistic possibility that we couldn’t get the votes for that and we couldn’t get those debts rolled over and we would be in a situation where we were technically in default. At that point, you were in uncharted territory.”
A similar controversy over the federal government’s ability to fulfill obligations emerged two years ago, Rep. Rashida Tlaib (D-MI) <a href="https://twitter.com/RashidaTlaib/status/1442852913915826187" target="_blank" rel="noopener">tweeted</a> “#MintTheCoin,” a hashtag that was used by proponents of the coin during the Obama-era debt crisis.
The most recent breach of the debt ceiling occurred after Republican lawmakers <a href="https://www.dailywire.com/news/here-are-the-concessions-house-speaker-kevin-mccarthy-gave-to-republican-holdouts-to-win-their-support" target="_blank" rel="noopener">struck a deal</a> with McCarthy under which the party’s new majority would introduce a budget that refrains from increasing the statutory debt limit. Senate Majority Leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jeffries (D-NY) contended in a <a href="https://www.democrats.senate.gov/newsroom/press-releases/schumer-jeffries-statement-on-need-to-pass-legislation-to-avoid-a-disastrous-default" target="_blank" rel="noopener">statement</a> that Republicans alone are to blame for the fiscal uncertainty. “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,” they said.

Federal Reserve Lowers Key Rate By Three Quarters Of A Point

Calls To Mint Trillion-Dollar Coin Resurface As Government Faces Debt Crunch

Should The Government Print A $1 Trillion Coin To Solve The Debt Crisis?

Federal Reserve

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