Tuesday, October 3, 2023
HomeEconomyHouse Speaker Says Democrats Should Limit Spending to Avert U.S. Debt Default

House Speaker Says Democrats Should Limit Spending to Avert U.S. Debt Default

WASHINGTON (Reuters) – House Speaker Kevin McCarthy said on Sunday he believed Democrats would agree to limit government spending to avoid a U.S. debt default, an idea he wanted to discuss with President Joe Biden.

Republicans who now control the House of Representatives are threatening to use the debt ceiling as leverage to demand spending cuts from Biden’s Democrats, who control the U.S. Senate.

This has sparked a bitter fight in Washington and Wall Street that is at least as damaging as the 2011 long war that has led to US credit Brief rating downgrade and years of forced domestic

“I want to sit down with him now, so there’s no problem,” McCarthy said in an interview with Fox News, referring to Biden. “I’m sure he knows we can change some places and put America on a track where we can save those rights instead of bankrupting them the way they’ve been spending their money.”

McCarthy noted The agreement reached by Trump-era US lawmakers in 2011 to suspend the statutory debt ceiling on Treasury borrowing is a possible evidence of such a compromise.

“I believe we can sit down with anyone who wants to work with me. I believe this president could be that person,” he said.

House Oversight Committee Chairman James Comer said on Sunday he hoped a debt default could be avoided but put the onus on Democrats to agree to spending cuts.

“Republicans are the elections that empower the American people in the midterms. Our campaign is based on the fact that we’re going to take spending cuts seriously,” Comer told CNN’s “State of the Union.” said in the interview.

“So the Senate is going to have to acknowledge the fact that we won’t back down until we see meaningful reform on spending.”

U.S. Treasury Secretary Janet Yellen said on Friday that the U.S. could hit the 31.$4 trillion statutory debt ceiling in January , forcing the Treasury to initiate unconventional cash management measures that could prevent a default by early June.

Congress enacted the debt ceiling in 2011 to give the government more flexibility to borrow, and must approve each increase to ensure that the U.S. meets its debt obligations and Avoid catastrophic defaults.



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