Senate Minority Leader Mitch McConnell (R-Ky.) said Thursday the U.S. “never has and never will” default on its debt as the country hit its $34.1 trillion debt ceiling and began what the government called “extraordinary measures” to continue paying bills.
House Republicans under the leadership of Speaker Kevin McCarthy (R-Calif.) have threatened to hold President Joe Biden’s administration hostage over the debt limit, demanding spending cuts targeting programs like Social Security and Medicare.
“Periodically the debt ceiling has to be lifted and it’s always a rather contentious effort,” McConnell told reporters in Kentucky. “In the end, I think the important thing to remember is that America must never default on its debt. It never has and never will.”
McConnell added that Republicans will negotiate with Biden over raising the debt limit, even though the White House has signaled that no conditions should be attached to this.
The Treasury Department announced it is taking “extraordinary measures” to ensure the U.S. continues to meet its financial obligations. Those measures will be exhausted this summer, officials said, and the U.S. will default unless the ceiling is raised.
McConnell said he expects both sides to come to an agreement “sometime in the first half 2023.”
Brian Deese, the director of the White House National Economic Council, said the debt ceiling is not something to play games with. The brinksmanship risks higher borrowing costs for the U.S. forever, he said.
“Even just the specter that the United States might not honor its obligations does damage to the economy,” Deese told CNN Thursday.
In 2011, House GOP members voted against raising the debt ceiling, forcing then-President Barack Obama and Democrats to make spending cuts. That year was the first time U.S. debt was downgraded by financial ratings firm Standard & Poor’s over the risk brought by “political brinkmanship,” according to The Washington Post.
McConnell, though, downplayed risks to the U.S. economy.
“I would not be concerned about a financial crisis,” he said.