10-5-2021
Cruz pins debt crisis on Democrats’ ‘trillions’ but
Trump spilled 11x more red ink than Biden.
Dems face GOP resistance as Treasury chief warns
of ‘catastrophic’ problems unless Congress raises
debt ceiling..
Contrary to Cruz’s effort to blame past Democratic extravagance, the glop of icing atop the humongous mountain of federal debt was added under the last president Donald Trump.
The debt ballooned by $7.8 trillion under Republican Donald Trump.
And for the tax cuts that he, Cruz and other Republicans
insisted would not drive up deficits accounts for
most of the current problem.
Since President Joe Biden took office in January,
the national debt has risen just $677 billion
well shy of even a single trillion.
Future spending will require a future debt limit increase but for now,
the Treasury Department needs Congress to raise the federal line of credit
so it can pay debts already incurred.
Treasury Secretary Janet Yellen has pleaded with Congress to set aside partisan considerations.
She warned Tuesday of “catastrophic” consequences, including lapsed Social Security payments to 50 million recipients, if the government is unable
to meet all of its financial obligations.
“I fully expect it would cause a recession,”
she said on CNBC.
The government is projected to exhaust its
current credit limit on Oct. 18.
The shortfall could reach $265 billion.
Treasury may be unable to pay 40% of
its obligations.
When the Treasury missed just $122 million in payments in 1979 during a congressional debt showdown, short-term interest rates immediately spiked and the U.S. government debt rating was downgraded for the first time.
A Sept. 24 analysis from the Bipartisan Policy Center warned that allowing the government to hit the debt limit “would be an unprecedented economic event with domestic and global implications,” noting that even the threat of default has shaken global markets.
Even a short-term default could cause higher borrowing costs and unemployment, walloping
the stock market and economic output.
“We’re going to make sure that these costs that
have already been incurred are going to be covered. Because even if you didn’t spend another penny in 2021, you’d have bills to pay. … This just has to be done,” said Sen. Ron Wyden, D-Ore.
In August 2019, Congress suspended the debt limit through the end of July 2021. The limit then reset
at around $28.4 trillion, which left relatively little room for deficit spending before the next fiscal cliff.
Nearly 60% of that debt — $16 trillion — piled up while one Republican or another occupied the White House in the last five decades.[/b]
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