White House warns debt limit showdown could hurt states | WGN 720 radio


A worker works on the light fixture above the North Portico of the White House in Washington, Friday, September 3, 2021. (AP Photo / Susan Walsh)

The White House is warning state and local governments against deep cuts to disaster relief, Medicaid and infrastructure grants. money from schools and other programs if Congress does not raise the US debt ceiling.

A fact sheet for state and local authorities that was obtained by The Associated Press is an attempt to increase public pressure on Republican Senate leader Mitch McConnell. President Joe Biden has so far insisted on bipartisan support to raise the debt ceiling that was almost fully accumulated before he took office, but McConnell, R-Ky., Has remained unresponsive and has repeatedly said that the Democrats had to act alone.

The Treasury Department has taken extraordinary steps to keep the government running after the suspended debt limit was restored in August to a level of $ 22 trillion, about $ 6 trillion less than the current total debt. The Treasury’s extraordinary measures will be exhausted by October, creating a potential for default.

The debt limit is the amount of money Congress allows the Treasury to borrow. It was suspended three times under the Trump administration and has been lifted dozens of times since 1960. Created at the start of World War I so that Congress no longer needed to approve every bond issue, the cap debt has become a political weapon like borrowing. has increased sharply over the past two decades.

McConnell has said he will not sanction further increases and that Democrats have the ability to go it alone.

“With a Democratic president, a Democratic House and a Democratic Senate, Democrats have all the tools they need to raise the debt ceiling,” the Kentucky senator tweeted Wednesday. “It’s their sole responsibility. Republicans will not facilitate another reckless, partisan tax and spending spree. “

Biden countered that Republicans are to blame for the growing deficit and that his plans for child care, schooling, health care, infrastructure and climate change adaptation will be fully paid off in the long run.

“Let me remind you that these are the same people who just four years ago adopted the Trump tax cut,” Biden said in remarks Thursday at the White House. “This has just inflated the federal deficit.”

With a total debt of $ 28.4 trillion, the government would be forced to cut programs dramatically unless restrictions on borrowing were lifted or suspended. The risk of recession and financial market turmoil would make it more difficult for states and cities to borrow, while wreaking havoc on investments in public pension plans.

The Biden administration’s fact sheet argues that the pain would be spread across states, as many programs rely on federal dollars. The government’s ability to respond to natural disasters such as hurricanes, earthquakes or forest fires would be reduced.

States would face severe Medicaid shortages because the federal government covers two-thirds of the costs. About 20% of Americans get their health insurance through Medicaid and the Children’s Health Insurance Program.

About $ 100 billion in infrastructure subsidies for highways, airports and public transportation would be in jeopardy. The more than $ 50 billion for special education, school districts serving the poorest students and other programs would also be at risk, as would $ 30 billion in food aid and $ 10 billion for public health. .


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