As the US Congress scrambled to come up with a spending bill to avoid a government shutdown, US President Donald Trump surprised many lawmakers by insisting that any such bill must cover the debt ceiling of the increase country.
He asked that any agreement must include that provision for the debt ceiling, the statutory limit on the amount of national debt that the country could incur. It is a matter of not discussed by each party.
Trump then went a step further, announcing, which surprised many lawmakersthat he was also trying to suspend or eliminate the debt limit before he takes office in January.
However, Trump's plans suffered a setback on Friday night when the US House of Representatives was controlled by Republicans legislation passed that would prevent a midnight government shutdown, but would leave his request to raise the debt ceiling.
So why is Trump suddenly so worried about the debt ceiling?
Hours before the deadline, the US House of Representatives passed a short-term bill to prevent a government shutdown and approved tens of billions of dollars in disaster relief.
What is the debt ceiling?
The debt ceiling is the country's borrowing limit. If the government needs to borrow more than that amount, it needs to get a transportation permit to do that.
Because the government has been running up deficits – spending more money than the taxpayer revenue it generates – it has to constantly borrow money and raise that debt limit .
That money is needed so that the government can fulfill its legal obligations, including the payment of social security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other payments.
Many economists have predicted negative consequences as a result of default, which could include a lowering of the credit rating, a negative impact on borrowing and the dollar, possible damage in the financial markets and job losses in the thousands, if not millions – and potentially all of that. lead to decline.
Why is it so political?
Almost since its inception in 1917, the debt ceiling has been politicized by both parties, but since 2011, it has become not only partisan but dangerous, says Laura Blessing, senior – associate professor and senior fellow with the Institute of Government Affairs at Georgetown University.
The biggest problem with the summit, according to some observers, is that it has become a dangerous political bargaining chip that holds the economy hostage to extract political demands. out
“The pattern is that the Republican Party liked to use this as a cudgel to try to force the Democrats into a legislative agreement that cuts spending, which is their policy priority,” Blessing said. they are particularly successful in doing this.”
The US government reached a tentative deal to lift the debt ceiling just days before the deadline. Almost every year it leads the country – and the world – to economic disaster over the debt ceiling. Andrew Chang explains what the debt ceiling is, and what would happen if it were not raised.
What does Trump say about the debt ceiling?
On Wednesday Trump said, in a joint statement with vice president-elect JD Vance, “it's not good to raise the debt ceiling but we'd rather do it on Biden's watch.” “
“If the Democrats don't cooperate on the debt ceiling now, what makes anyone think they would do it in June during our administration?”
The next day, Trump spoke to many US media outlets, warning of a government shutdown if Congress does not extend the debt ceiling or eliminate it entirely. In an interview with NBC News, Trump said yes getting rid of the debt ceiling entirely was the “wisest thing (Congress) would do.” I would totally support that.”
“The Democrats have said they want to get rid of him. If they want to get rid of him, I would lead the charge,” Trump said.
On Friday, Trump took to his social media platform Truth Social to post: “Congress needs to get rid of, or extend to, maybe, 2029, the stupid debt ceiling. Without this, we should never enter into a contract. Remember, the pressure is on anyone who is President.”
It is true that some Democrats have supported eliminating the debt ceiling, including Massachusetts Sen. Elizabeth Warren, who said Thursday through a social media post that she agreed with Trump that “Congress should end the debt ceiling and not rule again by hosting.” .”
But many Republicans have been steadfast in their support for the debt ceiling. That's why Blessing calls Trump's comments a “record-breaking moment,” as he calls on Republicans to drop this tool.
“That is exactly the opposite of the messages. The policy efforts, the strategy they have been using,” she said.
So why does Trump want to eliminate the debt ceiling?
As Trump prepares to push an agenda of tax cuts and border security, Trump fears that next year's debt ceiling fight could derail his plans, which expected to cost trillions of dollarswrote New York Times reporter Alan Rappeport, who has reported on the debt limit fights during the Trump and Biden administrations.
“This has nothing to do with earnest political ideology and everything to do with power,” said Todd Belt, a professor and program director at George Washington University's Graduate School of Political Management in Washington, DC.
Republicans like to have the debt ceiling so they can force concessions and cut spending when they're in the minority, he said.
“But they fear that when the shoe is on the other foot, when the Republicans have the majority, that the Democrats will be able to use this to stop the tax cuts that are Donald Trump to push.
Those tax cuts and other Trump spending priorities will mean less federal money to cover the debt, which is why Trump wants to remove the debt limit, said Belt, who 'noting that the reason the president-elect was pushing for this to happen now is because no I don't want to be blamed for being a free spender .
“He wants to be able to say this is something Joe Biden signed, not me.”
Does this mean the debt ceiling has been tightened?
Maybe not so fast.
While Trump and a handful of Democrats have called for it to be repealed, there doesn't seem to be much political will or the votes to repeal it, Belt said.
“Additionally, there are the die-hard Republicans who want to continue the debt ceiling because they truly believe they were sent to DC to shake up the system and stop the excess expenses,” he said.
