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House GOP acknowledges it is holding economy hostage in debt ceiling fight

The Republican caucus says Democrats must meet all their demands before they’ll agree to raise the debt ceiling.

By Josh Israel - May 24, 2023
Rep. Matt Gaetz, R-Fla., attends a House Judiciary Committee Field Hearing, Monday, April 17, 2023, in New York.
Rep. Matt Gaetz, R-Fla., attends a House Judiciary Committee Field Hearing, Monday, April 17, 2023, in New York. (AP Photo/John Minchillo, File)

As the U.S. government nears a possible catastrophic default on the national debt in early June, House Republicans are being more open about their plans to hold the economy hostage to their demands for massive spending cuts and their unwillingness to meaningfully negotiate.

“I think my conservative colleagues, for the most part, support Limit, Save, Grow,” Florida Republican Rep. Matt Gaetz told Semafor reporter Joseph Zeballos-Roig on Tuesday. “And they don’t feel like we should negotiate with our hostage.”

The Limit, Save, Grow Act passed the House with no Democratic support on April 26 and would cut federally funded programs by 22%. It would eliminate investments in clean energy and climate infrastructure and contains no language shielding vital agencies like the Veterans Administration and the Social Security Administration from the cuts. The far-right House Freedom Caucus, of which Gaetz is a member, said May 18, “There should be no further discussion until the Senate passes the legislation.”

Treasury Secretary Janet Yellen warned lawmakers on Monday that without congressional action to raise or suspend the debt ceiling, her department would likely not be able to pay the nation’s bills as of June 1 or shortly thereafter. Economic experts say that would probably spur a recession.

Though President Joe Biden and congressional Democrats have urged Congress to lift the debt ceiling to allow the Treasury to pay for spending already approved by lawmakers in both parties, House Speaker Kevin McCarthy has insisted that any debt ceiling increase be paired with significant cuts to discretionary spending.

The White House has reportedly offered several proposals to reduce the budget deficit, including freezing spending levels, raising more revenue by closing tax loopholes, and saving Medicare money by allowing the government to negotiate for lower prices on additional prescription drugs. McCarthy and his caucus have rejected each of these proposals.

On Tuesday, CNN reporter Manu Raju asked the California Republican: “You’ve been asking the White House to make a number of concessions. What concessions are you willing to make, and what are those concessions?”

“We’re going to raise the debt ceiling,” McCarthy answered.

Asked on Tuesday what his party was offering to Democrats, House Financial Services Committee Chair Patrick McHenry reportedly answered, “The debt ceiling increase.”

Sen. Brian Schatz (D-HI) noted Gaetz’s language on Tuesday, tweeting: “They are using the word hostage, but the media will pretend it is difficult to know for sure what’s happening. Can’t we at least observe their actions and listen to their words, and describe it in plain language?

Jeremy Funk, a spokesperson for the nonpartisan nonprofit group, which studies special interests in politics, said in a press statement:

A key player in the extreme MAGA House Majority now admits what anyone paying attention has suspected all along: Congressional Republicans consider the U.S. economy and millions of jobs a “hostage” while making unreasonable austerity demands that especially hurt low-income veterans and seniors. Anyone who doubts the looming default crisis and recession is not entirely manufactured by the MAGA majority need only give the fringe Freedom Caucus a call and hear it from the horse’s mouth.

An NPR/PBS NewsHour/Marist national poll released on Tuesday shows that 52% of American adults would like to see Congress increase the debt ceiling first and address spending cuts later. Forty-two percent said Congress should not raise the debt ceiling without simultaneously making significant spending cuts, even if it means a default.

Published with permission of The American Independent Foundation.

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