‘Reckless’: Dem Senate Majority Leader Schumer warns Speaker McCarthy Not to Use the Debt Limit as ‘Political Bargaining Chip’

Democrat Chuck Schumer, Senate Majority Leader from New York, warned newly-elected House Speaker Kevin McCarthy, a Republican from California, not to insist on spending cuts as part of any extension of the U.S.’s borrowing authority

“America pays its debts. Period. There should be no political brinkmanship with the debt limit,” said Schumer in a Tuesday evening statement. “It’s reckless for Speaker McCarthy and MAGA Republicans to try and use the full faith and credit of the United States as a political bargaining chip,” Schumer warned. 

McCarthy agreed to use the debt ceiling as leverage in a concession to the right wing of the party to become speaker and has called on Democrats to work with Republicans over a game plan to increase the federal debt limit. The Biden administration and Democrats say they intend to hold their ground and won’t allow the GOP to pressure them to cut federal programs. 

“What I would like to do is I would like to sit down with all the leaders and especially the president and start having discussions,” said McCarthy when speaking to reporters at the Capitol.

“If you had a child and you gave them a credit card, and they hit the limit, and you raised it again, clean increase and again and again, would you keep doing that or would you change the behavior?” said the speaker rhetorically.

Treasury Secretary Yellen issued warning last week

Janet Yellen, Treasury Secretary, issued a warning last week that the U.S. would reach its borrowing limit of $31.4 trillion on January 19. Although the government will hit its limit, Yellen will be able to hold off default for several months by using so-called extraordinary measures, including withholding contributions to the retirement funds of a federal employee.

Ultimately, the options will run out if the nation’s borrowing limit isn’t increased. However, it could lead to delays in government payments, including the issuing of Social Security checks, or a partial government shutdown.

Recent threats from Republicans to utilize using any vote on raising the debt limit as a tool to force Democrats to cut spending mirrors a similar standoff in 2011. Congressional members of the GOP sought to pressure then-President Obama to approve spending cuts in exchange for raising the ceiling. 

Fears of a government default shook financial markets and led to an unheard-of downgrade of the U.S.’s credit rating. 

“A default would be catastrophic for America’s working families and lead to higher costs,” said Schumer Tuesday.