During an appearance on ABC’s This Week over the weekend, House Speaker Nancy Pelosi (D-Calif.) went after Republicans for their refusal to support raising the debt ceiling, which is a necessary step to allow the United States to avoid defaulting on its financial obligations. Raising the debt ceiling does not authorize future spending. Rather, as explained by The Wall Street Journal, such a move “allows the Treasury to issue new debt to cover spending that Congress has already authorized, like the $900 billion pandemic relief bill signed into law by former President Trump.” As the Journal also explains, the Treasury Department covers government deficits by issuing “sellable debt” in the form of government securities, but the debt limit curtails the rate at which such can unfold.
Those securities are “like a loan: Investors trade cash for a promise that the government will pay them back with interest,” as summarized by the Journal. Allowing the U.S. to default instead of raising the debt ceiling could have serious consequences. For example, the government “could begin to miss payments on its existing obligations, such as monthly Social Security and veterans benefits, or paychecks to federal employees and members of the military,” the Journal explains. Republicans have nonetheless resisted calls to support raising the debt ceiling.
Discussing Republicans’ refusals, Pelosi commented as follows over the weekend:
‘Isn’t that irresponsible beyond words? The full faith and credit of the United States should not be questioned. That’s in the Constitution of the United States… There’s a school of thought that says we don’t even have to have these votes, but we do — as of now, we still do have to have it. And we cooperated on three occasions when President Trump was president in order to lift the debt ceiling. Even to have a discussion that [the government] could possibly be in default — it did the last time, it lowered our credit rating.’
Asked if she is confident that Democrats can get an increase to the debt limit passed on their own, Pelosi added as follows:
‘We want this to be bipartisan. If we didn’t want it to be bipartisan, we would’ve put it in the reconciliation bill. That would have been a decision we had to make when we wrote the budget act. But nonetheless, the decision was made that it would always be bipartisan… I would think that the business community would speak out on this, because it has devastating impact on our credit rating, as well as the global economy. This is beyond a big deal. So, let’s hope that the Republicans, enough of them, will find some level of responsibility to our country, to honor what’s in the Constitution that we not question the full faith and credit of the United States of America.’
Watch Pelosi’s comments below:
Speaker Pelosi tells @GStephanopoulos that Democrats want bipartisan support for raising the debt ceiling: “Let’s hope that the Republicans, enough of them, will find some level of responsibility.” https://t.co/FG6EAjzr2S pic.twitter.com/CD3amuGD7X
— This Week (@ThisWeekABC) September 26, 2021