Mitch McConnell says the US won’t default on its debt as he pushes the US closer to default

,

Mitch McConnell
Senate Minority Leader Mitch McConnell, R-Ky., listens as the Senate Rules Committee holds a hearing on the ‘For the People Act,’ which would expand access to voting and other voting reforms, at the Capitol in Washington, Wednesday, March 24, 2021. Scott J. Applewhite/AP
  • McConnell says he’s confident the US won’t default after spearheading a Republican effort to reject a debt limit hike.
  • He told Politico that Democrats would achieve a debt limit hike because “we always do.”
  • Pelosi said Democrats may attempt to skirt GOP opposition with maneuvers like minting a $US1 ($AU1) trillion coin.
  • See more stories on Insider’s business page.

Senate Minority Leader Mitch McConnell is insisting the US won’t default on its debt, after spearheading a Republican drive to reject a debt limit hike. The effort brought the nation closer to being unable to cover its bills within three weeks.

“I know the country is not going to default. I know they have the votes to do this,” the Kentucky Republican told Politico in an interview published Tuesday. “I don’t have any doubt that they will take care of this.”

He predicted Democrats would achieve a debt limit hike because “we always do.”

McConnell, alongside all Senate Republicans, blocked a measure averting a government shutdown and debt default on Monday as the GOP stepped up efforts to undercut President Joe Biden’s agenda. It’s forced Democrats to scramble for alternatives with Treasury Secretary Janet Yellen warning of a default on Oct. 18.

“The full faith and credit of the United States should not be put at risk,” she wrote in a letter to Congressional leaders.

Republicans like McConnell say they back raising the borrowing cap, but argue Democrats should do it alone to finance their planned $US3.5 ($AU5) trillion spending plan in reconciliation. It’s the maneuver Democrats are employing to skirt fierce GOP opposition and approve the package with a simple majority vote.

But Democrats and experts counter that lifting the debt ceiling covers past expenditures and needed to be raised this year regardless of Democratic spending plans. A party-line debt-limit hike in reconciliation could be fraught with peril for Democrats, given the tight timeline, narrow margin of error, and numerous procedural hoops shaping the process.

“We have to raise the debt ceiling”

Senate Majority Leader Chuck Schumer said Tuesday he would attempt to approve a debt ceiling increase via unanimous consent later in the day, a tactic aimed at approving the measure with a simple majority vote. The tricky thing about this is that any single lawmaker can torpedo it with a “no” vote.

Republicans appeared intent on blocking that as well in a sign they want to inflict maximum pain on Democrats and drag out the process. “There is no universe in which I am going to consent to lower the threshold and make it easier for [Schumer] to do so,” Sen. Ted Cruz told reporters on Tuesday as he pledged to oppose it. He accused Schumer of playing “political games.”

Sen. John Cornyn of Texas told Insider, “I think I’ll be the first to object” to the move, predicting other Senate Republicans would join him. Sen. Ron Johnson of Wisconsin also told reporters he’d also object.

The consequences of a potential default could have a large impact on the American economy. Once the Treasury is unable to pay back debt already owed, it’d have to prioritize certain federal initiatives over others. But millions of seniors could face an abrupt halt in Social Security checks, and US soldiers could miss out on their paychecks. The White House has warned of potential cuts for safety net programs like Medicaid.

House Speaker Nancy Pelosi said at a press conference on Tuesday that House Democrats were eyeing potential alternatives. Among those included minting a $US1 ($AU1) trillion coin suggested by Reps. Jerry Nadler of New York and John Yarmuth of Kentucky, along with another bill that would require Congressional action and a presidential signature to reject raising the debt limit.

“We have to raise the debt ceiling,” she said.