WASHINGTON (Reuters) – U.S. President-elect Donald Trump said on Sunday that the 2023 debt ceiling extension agreed upon by then-House Speaker Kevin McCarthy and President Joe Biden “would be considered one of the stupidest policy 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 after that deadline, but Congress will have to address the issue, perhaps around mid-year.
In a post on Truth Social, Trump said: “Extending the debt ceiling by a former Speaker of the House, a good man and friend of mine… would be one of the stupidest policy decisions made in years.”
He added: “Democrats should be forced to vote on this treacherous issue now, during the Biden administration, not in June. They should be blamed for this potential disaster, not Republicans!”
However, Republicans will control both chambers of Congress starting Jan. 3, and at least some lawmakers in the party will have to agree to increase or eliminate debt limits for it to become law.
Without the increase in debt limits for 2023, the United States would have experienced a historic default on its debt, which would have roiled financial markets around the world.
A debt default would also likely downgrade the U.S. credit rating, increasing borrowing costs for businesses and individuals.
At the time, many far-right Republicans in the House of Representatives called for deeper cuts in federal spending as a condition for raising the debt limit than negotiated.
About a week ago, as discretionary funding for the US government expired on December 20, Trump, encouraged by billionaire Elon Musk, called for either eliminating the debt limit or extending it, perhaps until 2029 when his presidency ends.
The idea was floated as part of an extension of government funding through March, but was quickly voted down by a coalition of House Democrats and hard-right Republicans, many of whom represent districts in states that lean toward Trump.
The government financing bill without stipulating the debt limit was then enacted into law.
the next (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 borrowing limit.
Democrats argued earlier this month that Trump's call to immediately increase or eliminate the debt limit was motivated by his desire to make room for a new round of tax cuts that would likely cut 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 enacted into law over several decades.
