By Casey Harper (The Center Square)
US Secretary of the Treasury Janet L. Yellen sent a letter to congressional leaders on Thursday noting that the agency has begun taking “extraordinary actions” to challenge the federal government’s more than $31 trillion debt ceiling.
That means Congress has until June to raise the debt ceiling or potentially default on US debt obligations for the first time.
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“Firstly, due to the statutory borrowing limit, I have decided that I will not be able to fully invest the portion of the Civil Service Retirement and Disability Fund (CSRDF) that is not immediately required to pay beneficiaries and the ‘borrowing suspension period’ will commence on Thursday, January 19, 2023 and end on Monday, June 5 , will last till 2023,” letter He said.
“I respectfully urge Congress to act quickly to protect the full faith and credit of the United States,” he said.
The Congressional Budget Office recently released budget figures that show the federal government is borrowing $4 billion a day in 2022, more than $10,000 per household and an overall deficit of $1.4 trillion. Pre-pandemic deficits were less than $1 trillion.
Lawmakers could raise the debt limit, but they couldn’t agree on who should serve as speaker of the House, raising serious questions about whether they could come together on the issue. Many want to use the opportunity to implement fiscal reforms.
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“The debate over our debt ceiling is a perfect example of Washington elites refusing to put your interests first,” said US Sen. Rick Scott, R-Fla. “We cannot keep rubber-stamping reckless spending. I am fighting every day to stop it.
Republicans also blasted the Biden administration and the recent omnibus spending bill. The White House said earlier this week that it would not negotiate with Republicans on the debt ceiling.
“Just a few weeks ago, Joe Biden signed a $1.7 trillion spending monster,” said U.S. Rep. Jim Jordan, R-Ohio. “And now the White House says it won’t negotiate with Republicans on the debt ceiling. They created the problem!”
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Experts raised the alarm, arguing the need for another debt ceiling increase, pointing to the current unsustainable trajectory of federal debt spending.
“America hits the $31 trillion debt ceiling today,” said economist Stephen Moore. “That’s 120% of our GDP and $246,876 per taxpayer. How can anyone believe this is sustainable?
Maya McGuinness, chairwoman of the Committee on a Responsible Federal Budget, warned of the consequences of going too far with using the debt ceiling for political purposes.
“The debt ceiling is too important to turn into a game of chicken, and those with the fiduciary responsibility of governing the nation should never suggest a default,” he said. “Politicians rightly concerned about the nation’s unsustainable debt path should take a hard line against new debt and oppose legislation that adds debt while offering specific solutions to control debt already on the books, rather than threatening to default on the bills. On top of debt already incurred.”
McGuinness argued that the debt problem was only going to get worse.
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“The debt ceiling gives all lawmakers a chance to pause, assess the nation’s fiscal situation and take necessary action. And it’s necessary. Debt as a share of GDP is at record levels,” he said. “We’ll start adding $2 trillion a year to the debt by the end of the decade. Interest payments are the fastest growing part of the budget and are projected to begin spending over $1 trillion annually within a few years. Social Security and Medicare hospital insurance trust funds go toward bankruptcy. And last year alone, Congress and the president passed bipartisan legislation that added nearly $2 trillion to the projected national debt. This is an urgent problem that is not getting the attention it needs. “
Syndicated with permission from The Center Square.