President-elect Donald Trump is adamant about inserting clauses in a budget deal that would raise the debt ceiling, something his party has always rejected, as a government shutdown draws near.
Trump told CBS, “We’ll see if we have a closure during the Biden administration.” Nevertheless, if it does happen, it will happen under Biden, not under Trump.
Donald Trump, the incoming president, has acknowledged that he wants Congress to lift the debt ceiling during the administration of Joe Biden. Republicans have opposed expanding debt limits for decades, but Trump’s promises to do away with the debt ceiling mark a change.
First and foremost, Trump told CBS News over the phone on Thursday that the debt ceiling ought to be lifted entirely. Second, a lot of the items they anticipated receiving [in a planned spending agreement] would now be totally removed. And we’ll see what occurs.
He said, “We’ll see if we have a closure during the Biden administration.” Nevertheless, if it does happen, it will happen under Biden, not under Trump.
Due to Trump’s attacks, Republican Speaker of the House Mike Johnson withdrew a government budget measure that would have provided three months of federal funds to keep the government open, putting Johnson in a difficult position as the government is on the approach of shutting down.
Then, at Trump’s request, Republican leaders presented a trimmed-down package that would suspend the debt ceiling for two years, until January 30, 2027. Additionally, 38 Republicans voted against the bill.
Republicans may alter the plan to include conservative-friendly provisions like extending farm and disaster aid while excluding debt-limit measures, or they may attempt to pass another stopgap spending bill in the final hours before an impending shutdown, pushing other provisions into the holidays.
Breaking from party lines
In contrast to his party’s long-standing resistance to extending the debt ceiling because they believe it would permit bloated budgets and higher government expenditure, Trump is adamant about lifting it and even doing away with it.
Trump thinks he can escape responsibility for the government’s borrowing if Congress approves a spending deal while Biden is still in office. The Tax Cuts and Jobs Act, which Trump approved in 2017 during his first term, would be easier to extend if Congress agreed on a spending plan now. This would also aid Trump when he resumes office next month.
Trump has previously proposed doing away with the debt cap. The former president said in 2017 that there are many valid arguments to do away with the cap. He and Chuck Schumer, the Senate Minority Leader at the time, agreed to a gentleman’s agreement, but the early efforts were unsuccessful.
In January 2023, Treasury Secretary Janet Yellen implemented temporary exceptional measures to keep the United States from defaulting on its debt after it had last crossed its debt ceiling.
In a similar vein, the Treasury Department will once more use such steps if the debt limit is hit on January 1st, delaying the default date until the summer of 2025—a scenario that the president-elect is trying to avoid.
According to the Congressional Budget Office, the most recent significant government shutdown took place during Trump’s administration in 2018, when a 35-day partial shutdown cost $11 billion and reduced the United States’ annual growth projections by 0.2%. Approximately 800,000 government employees were impacted by the shutdown.
Fortune was directed to Trump’s Friday morning Truth Social post, which stated that Congress must either repeal or extend the absurd Debt Ceiling, potentially until 2029, by the Trump-Vance transition team when contacted for comment. We should never come to an agreement without this. Keep in mind that whoever is president is under pressure.
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Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.