President Biden on Wednesday said he’s confident Congress will raise the federal government’s debt limit, despite threats from Republicans to block any effort to raise the ceiling on how much the government can borrow to pay its bills.
“They’re not going to let us default,” Mr. Biden told reporters at the White House, adding that “$8 trillion of [the debt] is on the Republicans’ watch.”
The $8 trillion was a reference to the total added to the federal debt load under former President Trump through tax cuts and new spending, according to data from the Federal Reserve.
Despite Mr. Biden’s comments, Senate Republicans have made clear they will not provide the votes to help congressional Democratic majorities push through the politically unpopular increase. Nearly all Senate Republicans on Tuesday released a letter stating they will not vote to increase the debt ceiling, saying new Democratic spending plans are set to drive the government’s red ink even higher.
“This is a problem created by [Democratic] spending. Democrats will have to accept sole responsibility for facilitating it,” the letter read.
Democrats, for their part, share Mr. Biden’s confidence. Senate Majority Leader Charles E. Schumer, New York Democrat, said Wednesday he also didn’t believe Republicans would let the country default, a move that would cause havoc in global equity and investment markets.
The debt ceiling is a government-imposed limit on how much money it can borrow to pay for its expenditures, like federal employee salaries. Under Mr. Trump, lawmakers agreed to a two-year suspension of the debt limit, but that expired at the end of July.
Congress would need to pass legislation to raise or suspend the debt ceiling or risk defaulting on the U.S. government’s obligations.
Democrats had considered including a debt ceiling raise in their current $3.5 trillion “human infrastructure” spending package. But the measure was ultimately not included in the final version unveiled this week.
Treasury Secretary Janet Yellen on Monday urged lawmakers to approach the debt ceiling on a “bipartisan basis,” warning that “irreparable harm” could befall the U.S. economy if the fight gets bogged down in partisan rancor.
“In recent years, Congress has addressed the debt limit through regular order, with broad bipartisan support. In fact, during the last administration, Democrats and Republicans came together to do their duty three times. Congress should do so again now by increasing or suspending the debt limit on a bipartisan basis,” Ms. Yellen said in a statement.