CNN
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Millions of Americans could face massive consequences unless Speaker Kevin McCarthy can navigate out of a debt trap he has set for President Joe Biden that is instead threatening to capture his House Republicans.
The California Republican traveled to Wall Street on Monday to deliver a fresh warning that the House GOP majority will refuse to lift a cap on government borrowing unless Biden agrees to spending cuts that would effectively neutralize his domestic agenda and neuter his White House legacy.
McCarthy also assured traders, however, that he would never let the US government default on its obligations – a potential disaster that could halt Social Security payments, trigger a recession and unleash job cuts by the fall in the event that the debt ceiling is not raised.
This is where the risk to Americans comes in. It’s hard to see how a rookie speaker, with a tiny majority and a conference containing plenty of extremists, can engineer either of these outcomes.
Most countries don’t require the legislature to raise the government’s borrowing threshold. But the quirky situation in the US has made a once routine duty an opportunity for political mischief in a polarized age. Since the government spends more than it makes in revenue, it must borrow money to service its debt and pay for spending that Congress has already authorized. It has no problem getting more credit since the US pays its bills and has always had a stellar credit rating, despite one previous downgrade from the threat of default.
At least, that’s the way it has worked until now.
McCarthy beseeched his conference in a closed-door meeting on Tuesday to line up behind a bill that would raise the debt limit for a year but require a flurry of spending concessions from Biden. He styled the measure as an initial way of forcing the president to the negotiating table. But the bill is purely tactical since it’s got no chance of passing the Democratic-led Senate.
But in a sign of how difficult it will be for the speaker to even pull this gambit off, there were signs of internal disagreement on what should be in the package among GOP members.
Rep. Scott Perry, the chairman of the hardline House Freedom Caucus, was frustrated about a lack of specificity in the plan and wanted steeper cuts.
“I…
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