Senate Republican leader Mitch McConnell dismissed concerns about the US government defaulting on its obligations later this year, when the Treasury Department risks running out of money.
(Bloomberg) — Senate Republican leader Mitch McConnell dismissed concerns about the US government defaulting on its obligations later this year, when the Treasury Department risks running out of money.
“Periodically the debt ceiling has to be lifted and it’s always a rather contentious effort,” McConnell told reporters at an unrelated event in his home state of Kentucky on Thursday. “In the end, I think the important thing to remember is America must never default on its debt. It never has and never will.”
The Senate minority leader’s support in 2021 was critical in corralling enough GOP votes in that chamber to allow the most recent debt-limit increase to go through.
His assurance on averting a default contrasts with aggressive moves by conservative Republicans in the GOP-led House to force through deep spending cuts by demanding them as a condition for a debt-limit hike. That’s stoked concerns that the US faces a repeat of 2011, when an entrenched fight over raising the ceiling roiled financial markets and hurt the economic recovery at the time.
“I would not be concerned about a financial crisis,” McConnell said Thursday.
Talks Predicted
While the White House continues to insist it won’t negotiate over boosting the debt ceiling, McConnell predicted eventually that step will come. He spoke after Democratic Senator Joe Manchin also called for talks and linked an increase to some fiscal plan.
“We’ll end up in some kind of negotiation with the administration over what are the circumstances or conditions under which the debt ceiling will be raised,” McConnell predicted. “This will have to be dealt with sometime in the first half of 2023.”
The Treasury on Thursday began deploying extraordinary measures to keep from breaching the debt limit, and Secretary Janet Yellen anticipates such steps will tide the department over at least to early June.
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