Kevin McCarthy Says US Won’t Default in Debt Ceiling Fight

House Speaker Kevin McCarthy (R-Calif.) sought to reassure investors Monday that the U.S. government will not see a first default on its debt following the looming showdown later this year over the Treasury Department’s borrowing limit.

In remarks broadcast live from the hallway just outside his office, McCarthy said, “Default on our debt is not an option. But neither is it a future with higher taxes, higher interest rates, and an economy that doesn’t work for American workers.

Although presented as “an address”, the remarks, taking around 10 minutes, did not break the deadlock. The White House said it would not negotiate beyond the limit; Republicans say they want unspecified budget changes in return for lifting the debt ceiling, with an implied threat of default if they are not appeased.

Responding to McCarthy’s remarks sent to reporters just minutes before they were delivered, White House spokesman Andrew Bates said Republicans wanted to send the economy into a tailspin through a default. payment.

“Tomorrow, President Biden will show the American people his plan to build on the unprecedented deficit reduction his leadership has already delivered by ensuring that the wealthiest taxpayers and big business pay their fair share and lowering prescription drug prices,” Bates said of Biden’s state of play. Union speech Tuesday evening.

In his speech, McCarthy repeated several points Republicans had previously made as they sought to portray the White House as unreasonable in wanting no strings attached to a debt ceiling increase. He said Social Security and Medicare are ‘irrelevant’ and that Republicans would ‘preserve our ability to defend this nation from threats abroad’, which could be seen as a no-no. -reduction of defense expenditure.

The government ran into the $31.38 trillion limit in January, forcing the Treasury Department to dip into its bag of bookkeeping maneuvers to avoid breaching it.

While these “extraordinary measures” will give the Treasury some time to continue borrowing, it’s unclear how much extra time it will have. Treasury Secretary Janet Yellen told lawmakers she doesn’t expect to breach the debt ceiling until at least early June, but offered no more specific timeline.

A fight over the debt limit in 2011 between Barack Obama’s White House and a Republican House brought the Treasury Department days away from its claimed date when it could no longer legally borrow or pay all bills owed. Although a deal was eventually reached, the episode saw ratings agency Standard & Poor’s downgrade US debt creditworthiness for the first time ever.