- Nancy Pelosi said raising the debt limit will pay for the $7 trillion in debt incurred under Trump.
- This follows a letter from Janet Yellen that said the US ability to pay bills will likely run out in October.
- The GOP pledged to not work with Democrats on raising the limit, citing “irresponsible spending.”
- See more stories on Insider’s business page.
Speaker of the House Nancy Pelosi cited the debt incurred under President Donald Trump as the reason Congress needs to act to raise the debt ceiling.
“We’re paying the Trump credit card with what we would do to lift the debt ceiling,” Pelosi said during a Wednesday press conference. “It’s the responsible thing to do. I would hope Republicans would act in a similar way,” she added.
Pelosi was referring to the $7 trillion added to the national debt under Trump. Roughly $2 trillion was the product of the 2017 Republican tax law which slashed corporate taxes. Another portion was the result of Congress approving several federal rescue packages with stimulus checks, federal unemployment benefits, and small business aid to prop up the economy during the pandemic.
Treasury Secretary Janet Yellen wrote a letter to Pelosi on Wednesday detailing the urgency in raising the debt ceiling and said that the country’s ability to pay its bills will likely run out sooner than planned. After Congress missed a July 30 deadline to raise or suspend the debt ceiling, the US Treasury employed “extraordinary measures” to keep paying off the government’s bills. But Yellen noted that those measures will likely run out in October due to uncertainty caused by the pandemic and related federal aid.
Video: Schumer says Republicans unlikely to let U.S. default on debt (Reuters)
“However, based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October,” Yellen wrote.
The Congressional Budget Office previously forecasted the Treasury could keep the government afloat until October or November. Yellen warned against waiting until the last minute to act and requested “broad and bipartisan support” to prevent a government default.
But, as Insider has previously reported, addressing the debt ceiling has been highly partisan. Last month, 46 Senate Republicans signed a pledge agreeing they would not help Democrats raise the debt limit, citing the Democrats’ “irresponsible spending” related to their $3.5 trillion social welfare bill they’re seeking to pass.
And more recently, Republican Rep. Kevin Brady, the ranking member on the House Ways and Means Committee, told Insider it is highly unlikely the GOP will help Democrats raise the debt ceiling given their efforts to pass legislation through reconciliation, which can be done without any Republican support.
“Considering they haven’t had a single conversation about spending, stimulus, or the debt with us to date, I think they, by their behavior, have taken responsibility on passing this by themselves,” Brady told Insider.
The Texas Republican added: “Unless they have a conversation with Republicans, certainly there won’t be Republican support in the House. Take it or leave it, no conversations, no working together – it’s their responsibility, unfortunately.”
Pelosi noted during the press conference that Democrats will not go at it alone on raising the debt limit and said it will not be included in their $3.5 trillion reconciliation bill, and Senate Majority Leader Chuck Schumer echoed those sentiments in a Wednesday press call.
“It would be the height of irresponsibility for Republicans to take the debt limit hostage,” Schumer said. “We must get it done,” he added. “Stay tuned.”