The Congressional Budget Office issued a warning Wednesday that the United States government could face a debt crisis this summer if the current $31.4 trillion debt limit is not raised or suspended. Also Wednesday, Senate Majority Leader Schumer (at lectern) criticized Republicans for not advancing a plan in the face of the approaching deadline on the debt limit. Photo by Jemal Countess/UPI | License Photo
Feb. 15 (UPI) -- The Congressional Budget Office issued a warning Wednesday that the United States government could face a debt ceiling crisis this summer if the current $31.4 trillion debt limit is not raised or suspended, as Republicans spar with the Biden administration over conditions to increase it.
"The Congressional Budget Office projects that, if the debt limit remains unchanged, the government's ability to borrow using extraordinary measures will be exhausted between July and September 2023 -- that is, in the fourth quarter of the current fiscal year," CBO said in a statement.
"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," CBO added. "As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both."
Senate Majority Leader Chuck Schumer, D-N.Y., was critical of the GOP's plans, or lack thereof, to address the debt ceiling. On Wednesday, he echoed President Joe Biden's calls for House Republicans to unveil their budget plan in a statement released by Senate Democrats.
"It takes 218 votes, as we know, to pass anything in the House, and with a razor-thin GOP majority paralyzed by internal division -- and with the stronghold the MAGA Republicans have on the Speaker -- Speaker McCarthy will have a very difficult time getting everyone on the same page, if he can do it at all," Sen. Schumer said.
"Very soon the MAGA brigade will see that the speaker made a bunch of promises that he won't be able to keep. And I worry greatly that the dangers of slipping into default will only increase as the toxic dynamic within the House GOP gets worse day by day," Schumer said.
The United States hit the debt limit last month, which requires Congress to increase it for the U.S. Treasury to meet existing national financial obligations. In the meantime, the Treasury has started using extraordinary measures, including suspending certain investments, in order to continue borrowing additional funds for a limited time.
House Republicans have indicated they will demand deep spending cuts before agreeing to raise the debt limit, while the Biden administration wants the debt ceiling raised without conditions.
On Wednesday, the White House claimed the Republican legislative agenda would add more than $3 trillion to the national debt, despite GOP leaders insisting reducing the country's debt is among their highest priorities.
In a statement, the White House said GOP House leaders' want to extend expiring Trump-era tax cuts would add $2.7 trillion to the national debt. Those tax cuts gave households with annual incomes of $4 million or more a $175,000 per year tax cut.
The first Republican House bill passed would have cut money for the IRS intended to increase delinquent tax collections. The White House said if implemented, that bill would increase the national debt by $114 billion.
The White House said Republicans are also advocating and proposing repealing tax increases on large corporations that would add $296 billion to the national debt.
The Republican agenda also calls for repealing reforms the Biden administration said would increase what Medicare pays to big drug companies, raising the national debt by another $159 billion while raising prescription drug costs for seniors.
In January, the Biden administration said raising the national debt ceiling is non-negotiable, because raising it is a constitutional duty of Congress to pay for United States financial obligations that have already been incurred.
Treasury Secretary Janet Yellen notified congressional leaders that she is already taking "extraordinary measures" to make sure there's enough money to meet existing U.S. obligations. If the U.S. debt ceiling isn't raised in time, she warned it could cause "irreparable harm to the U.S. economy."
During the Trump administration, Republicans in Congress did make budget cutting a priority as the national debt soared. When Trump took office the national debt was $19.9 trillion. When Biden took office four years later the debt had increased to nearly $28 trillion, according to the Treasury Department.
The White House statement Wednesday said the American people "deserve to see Congressional Republicans' full and detailed budget plan and compare it with the president's budget plan", which he will release March 9.
House GOP Budget Chair Rep. Jodey Arrington is drafting a budget document for March expected to lay out what Republicans want to negotiate before lifting the debt ceiling. But Arrington acknowledges that Republicans are also responsible for the national debt, not just Democrats.
"Putting balanced budgets on paper and beating our chests about fiscal responsibility in a party that has also contributed to the problem -- not interested," he said.