WASHINGTON (Reuters) -U.S. President-elect Donald Trump said on Sunday the 2023 debt ceiling extension agreed 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 for several months beyond that deadline, but Congress will have to address the issue, possibly around mid-year.
In a post on Truth Social, Trump said, “The extension of the Debt Ceiling by a 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, “The Democrats must be forced to take a vote on this treacherous issue NOW, during the Biden Administration, and not in June. They should be blamed for this potential disaster, not the Republicans!”
Republicans, however, will control both chambers of Congress beginning on Jan. 3 and at least some of the party’s lawmakers would have to go along with a debt limit increase or elimination in order for it to become law.
Without the 2023 debt limit increase, the United States would have seen a historic default on its debt payments that would have roiled financial markets worldwide.
A debt default would also likely have brought a downgrade in the U.S. credit rating, raising borrowing costs for businesses and individuals.
At the time, several far-right Republicans in the House of Representatives had pushed for deeper federal spending cuts as a condition for raising the debt limit than what had been negotiated.
About a week ago, with U.S. government discretionary funding due to expire on Dec. 20, Trump, encouraged by billionaire Elon Musk, demanded the debt limit either be eliminated or extended, possibly to 2029 when his presidency would end.
That idea was tacked onto an extension of government funding into March, but it was quickly voted down by a coalition of House Democrats and hard-right Republicans, many of whom represent districts in Trump-leaning states.
A government-funding bill without a debt-limit provision was then enacted into law.
Next (LON:) month, Republicans in the newly-elected Congress are expected to insist on deep federal spending cuts as a condition for raising the country’s borrowing limit.
Democrats earlier this month argued Trump’s call for an immediate increase or elimination of the debt limit was motivated by his desire to make room for a new round of tax cuts that likely would lower revenues and thus add more to the debt.
The national debt currently stands at about $36.1 trillion due to federal spending levels and tax cuts that have been enacted into law over several decades.
