Debt Ceiling: President-elect Donald Trump, Vice President-elect JD Vance, and billionaire entrepreneur Elon Musk have upended a GOP-backed agreement to fund federal agencies through March. This move has intensified the pressure on Republican leaders in Congress to quickly craft a plan to avert a government shutdown, just days before the holiday season.
Trump and Vance criticize deal
In a statement released Wednesday, Trump and Vance criticized the proposed deal for containing provisions favored by Democrats. Their objections, however, took a significant turn when they called on Congress to address the debt ceiling now, rather than delaying it until next year.
“Increasing the debt ceiling is not great, but we’d rather do it on Biden’s watch,” Trump and Vance stated. “If Democrats won’t cooperate on the debt ceiling now, what makes anyone think they would do it in June during our administration? Let’s have this debate now.”
Understanding the Debt Ceiling
The debt ceiling is a cap placed on the amount of money the U.S. government can borrow to pay its debts. Every year, Congress passes a budget covering essential government functions, including federal salaries and programs like Social Security. However, the government has consistently spent more than it takes in, leading to an increasing federal deficit. When this occurs, the government must borrow money to meet its obligations, but the debt ceiling limits the amount it can borrow.
As he prepares to take office, Trump has a legislative agenda that includes border security and the extension of his Tax Cuts and Jobs Act, which overhauled the tax code in 2017. However, a standoff over the debt ceiling could complicate efforts to push through these priorities quickly, particularly with a Republican-led House and Senate.
Eliminating the debt ceiling altogether
Trump has advocated for eliminating the debt ceiling altogether, a position that has garnered some support among Democrats in the past. In a phone interview with CBS News’ Robert Costa on Thursday, Trump emphasized his stance.
“Number one, the debt ceiling should be thrown out entirely,” Trump said. “Number two, a lot of the different things they thought they’d receive [in a recently proposed spending deal] are now going to be thrown out, 100 percent. And we’ll see what happens. We’ll see whether or not we have a closure during the Biden administration. But if it’s going to take place, it’s going to take place during Biden, not during Trump.”
Challenges in reaching a compromise
The likelihood of Congress agreeing to Trump’s demands remains uncertain. Many Republicans in both the House and Senate have resisted raising the debt ceiling without corresponding spending reforms. Debt ceiling debates often evolve into broader discussions about the federal budget, with conservatives pushing for cuts to what they view as excessive government spending. Furthermore, Democrats retain control of the Senate and the White House, making it unclear whether a compromise can be reached.
White House Press Secretary Karine Jean-Pierre reacted sharply to the call for a government shutdown, warning of the negative impacts on American families. “Shutting down the government would harm families and endanger services Americans rely on,” Jean-Pierre stated. “Republicans need to stop playing politics with this bipartisan agreement or they will hurt hardworking Americans and create instability across the country. President-elect Trump and Vice President-elect Vance ordered Republicans to shut down the government and they are threatening to do just that — while undermining communities recovering from disasters, farmers and ranchers, and community health centers.”
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