WASHINGTON (Reuters) – U.S. President-elect Donald Trump said on Sunday that the 2023 debt ceiling extension negotiated by then-House Speaker Kevin McCarthy and President Joe Biden “will go down as one of the dumbest political decisions made in years.”
Under the 2023 budget deal, Congress suspended the debt ceiling until Jan. 1, 2025. The U.S. Treasury will be able to pay its bills a few months after that deadline, but Congress will have to address the issue, likely in the middle of the year.
In a post on Truth Social, Trump said, “The expansion of the debt ceiling by the previous Speaker of the House, a good man and a friend of mine… will go down as one of the dumbest political decisions made in years.”
He added, “Democrats must be forced to vote on this treasonous issue NOW, during the Biden administration, not in June. They should be blamed for this potential disaster, not the Republicans!”
Republicans, however, will control both houses of Congress starting Jan. 3 and at least some of the party’s lawmakers would have to agree to raising or repealing the debt limit for it to become law.
Without raising the debt limit in 2023, the United States would experience a historic debt default that would roil financial markets around the world.
A debt default would also likely lead to a downgrade in the US credit rating, raising the cost of borrowing for businesses and individuals.
At the time, several far-right House Republicans advocated deeper cuts in federal spending as a condition for raising the debt limit beyond what was negotiated.
About a week ago, as discretionary funding for the US government expires on December 20, Trump, encouraged by billionaire Elon Musk, demanded that the debt limit be either lifted or extended, possibly until 2029, when his presidency ends.
The idea was included in the government funding extension in March, but was quickly rejected by a coalition of House Democrats and hard-right Republicans, many of whom represent districts in Trump-friendly states.
The draft law on state financing without the debt limit provision then entered into force.
Following (LON:) this month, Republicans in the newly elected Congress are expected to insist on deep cuts in federal spending as a condition for raising the nation’s debt ceiling.
Democrats argued earlier this month that Trump’s call for an immediate increase or repeal of the debt limit was motivated by his desire to make room for a new round of tax cuts that would likely reduce revenue and further increase the debt.
The national debt currently stands at about $36.1 trillion due to federal spending levels and tax cuts enacted into law over several decades.
