McCarthy Renews Calls for Spending Cuts to Raise Debt Ceiling
The Wall Street Journal reports McCarthy Renews Calls for Spending Cuts to Raise Debt Ceiling
House Speaker Kevin McCarthy (R., Calif.) said Sunday he would seek to negotiate with President Biden over raising the federal debt ceiling but renewed his calls for cuts in spending, days after the Treasury Department said the government may not be able to pay its bills by early summer.
“Let’s sit down together. Let’s look at the places that we can change our behavior,” Mr. McCarthy said in an interview on Fox News. “Why would we sit back and be so arrogant to say, ‘No, there’s no waste in government?’”
Treasury Secretary Janet Yellen on Friday called on Congress to raise the debt ceiling as quickly as possible. She said the government would hit the roughly $31.4 trillion borrowing limit on Jan. 19, when Treasury will begin implementing so-called extraordinary measures to manage the government’s cash flow that are expected to last at least until early June. Republicans, who recently took control of the House, have insisted that any increase of the debt limit include cuts in spending, a demand that many Democrats reject. The White House has called on Congress to raise the debt ceiling without conditions.
“There’s going to be no negotiation over it. This is something that must get done,” White House press secretary Karine Jean-Pierre said Friday, noting that lawmakers have previously increased the debt ceiling on a bipartisan basis.
“It is one of the basic items that Congress has to deal with, and it should be done without condition,” she said.
Yellen’s Letter to Congress
“While Treasury is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government’s obligations, it is unlikely that cash and extraordinary measures will be exhausted before early June,” Ms. Yellen wrote to Congressional leaders.
Question of the Day
When does McCarthy buckle on the debt ceiling?
Sooner, later, or not at all?
My guess is at the last minute, possibly even after the last minute when some closures happen.
I rather doubt Democrats will give an inch. If not, McCarthy likely to be humiliated.
This post originated at MishTalk.Com
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Mish
Economics is a science of lies. The FED’s monetary transmission mechanism only became interest rate manipulation after legal reserves were discontinued. By tracking legal reserves, all recessions were both predictable and preventable.
We knew this already:
In 1931 a commission was established on Member Bank Reserve Requirements. The commission completed their recommendations after a 7 year inquiry on Feb. 5, 1938. The study was entitled “Member Bank Reserve Requirements — Analysis of Committee Proposal”
After a 45 year hiatus, this research paper was “declassified” on March 23, 1983. By the time this paper was “declassified”, Nobel Laureate Dr. Milton Friedman had declared RRs to be a “tax” [sic].
Now the FED is without a rudder or an anchor. Presumably, to get a recession, there would have to be a marked reduction (negative rate-of-change) in short-term money flows (“M” as defined by Shadow Stats).
And? Is that supposed to be an excuse for violating the constitution by reneging on the debt?