Debt limit would be ‘major leverage point’ for GOP majority

Washington — Republican Rep. Jim Banks of Indiana signaled Thursday that the GOP could use the impending debt limit as a negotiating tool with President Biden early next year if the party regains a majority in the House in November elections.

“It’s a major lever that the House Republican majority can use to control spending,” Banks said. “We’ve seen the national debt now exceed $31 trillion. That’s a key driver of inflation.”

While some Republicans view the debt ceiling as a way to rein in spending, failure to raise or suspend the debt ceiling in a timely manner could result in a US debt default, which would have devastating consequences for the economy.

Banks, who is widely seen as a candidate to become majority whip if Republicans regain a majority in the House, made the remarks in an interview with CBS News Chief Elections Correspondent Robert Costa. a Paramount Government Relations event.

“We need to take advantage of a time like this to do things that the administration wouldn’t otherwise do, Democrats don’t support,” Banks said. He said spending caps, balanced budgets and cutting unnecessary discretionary spending must be on the table.

“I think Republicans are uniformly in favor of using this moment as an opportunity to do something about spending,” he added.

The national debt topped $31 trillion, according to a Treasury report released earlier this month, approaching the limit of around $31.4 trillion. At the same time, the United States has been struggling with 40 years of high inflation and rising interest rates that will make the country’s debt more expensive.

Representative Jim Banks, a Republican from Indiana, speaks during a press conference at the Capitol in Washington, DC on Thursday, June 9, 2022. / Credit: Eric Lee/Bloomberg via Getty Images

The current limit is expected to cover borrowing until early next year, but the exact date when the US government would run out of money to pay its bills – the so-called “X date” – is not yet clear. .

“I don’t know why we can’t come together to address the spending issues, and the debt limit is a serious time for us, both parties, the White House and Congress to come together to find solutions,” he said. Banks said.

Less than a year ago, Congress raised the debt ceiling by $2.5 trillion in a party vote after months of negotiations. Treasury Secretary Janet Yellen warned at the time that a default would be catastrophic for the US economy.

Even when Congress has finally been able to reach an agreement, the threat of default has consequences. In 2011, S&P downgraded the US government’s credit rating to AA+. It was the first time the United States had been rated lower than AAA. The downgrade came just days after the Republican-controlled Congress raised the debt ceiling.

During Thursday’s conversation, Banks also left the door open for impeachment proceedings against Biden administration officials if Republicans regain the House. Banks said there would be a “vigorous monitoring program”.

“If these investigations and surveillance initiatives lead to further actions such as the removal of Secretary Mayorkas, I cannot predict at this point,” Banks said, referring to Homeland Security Secretary Alejandro Mayorkas.

Banks also suggested the GOP would seek to limit financial support to Ukraine. He said he did not expect aid to be completely cut off, but noted that Americans want the government to address domestic issues before addressing global issues.

“As long as America is on its knees, we cannot provide blank checks to the rest of the world,” Banks said. “That includes Ukraine and the rest of the world.”

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