Americans should be concerned with debt limit discussions in Congress because all are affected by the fallout from these decisions, according to U.S. Rep. Scott Perry, a Pennsylvania Republican.
Consumers see it in inflation, with increased prices at grocery stores, gas stations, and most other places.
“We keep flooding the economy by spending trillions and trillions of dollars that actually don’t even exist. So, every dollar that you have is actually worth a little bit less than $1 every time we do that,” Perry told The Epoch Times. “If you’re sick of paying the high prices, and the unaffordability of things and the tough choices that you have, you should be concerned about what we’re dealing with in Washington.”
The national debt is $31.46 trillion, 20 percent more than the economy. Think of the debt ceiling as a credit card limit.
Limit, Save, Grow Act
The House passed the Limit, Save, Grow Act last month that would return total discretionary spending to the Fiscal Year 2022 level in fiscal year 2024 and cap annual growth at 1 percent for a decade. Senate Republicans have expressed support for the act. It would rescind unspent COVID relief funds; repeal most of the Inflation Reduction Act’s energy and climate tax credit expansions; rescind that act’s new Internal Revenue Service funding; make changes to energy, regulatory, and permitting policies; and impose or expand work requirements for certain able-bodied, childless recipients of Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF). The plan would also prevent the implementation of President Joe Biden’s student debt cancellation and income-driven repayment expansion.“What we’re saying is that we have agreed as a government that we’re going to pay for certain things, but we haven’t paid for them yet,” Perry said. “We have agreed that we’re going to pay for more COVID pandemic spending. Well, the pandemic is over, so we’re saying, instead of sending out that money that is waiting to be sent out, let’s put it towards the credit card limit so that we don’t have to raise the limit as much.”
And he says none of his constituents have told him that the problems the United States is having would be solved by spending more on the IRS.
Biden Offers “Nothing of Consequence.”
Interest on today’s national debt is snowballing.
“If we do nothing, we will pay more in interest in the next 10 years than we paid in the last 83 years,” U.S. House Speaker Kevin McCarthy (California-R) said Wednesday in a rare bicameral Republican press conference.
If the ceiling is not raised, The United States could default on its debt by June 1, Janet Yellen, secretary of the U.S. Treasury, said this week. The Treasury has raised interest rates in an attempt to curb inflation. Short-term consumer loan rates for items like car loans are around 7 percent for those with good credit. Long-term rates, such as 30-year mortgages, are at 6.6 percent.
“If you’re trying to buy a home right now and you were hoping to get a 2.5 percent interest rate, you can forget that because the Fed keeps on raising the interest rates to try and bring things back into alignment. And what they’re doing is they’re shutting down the housing market and everything that’s associated with it,” Perry said, listing some of the industries associated with home construction, such as faucet sales and manufacturers, lumber and labor, all hurt by high interest rates and the resulting softening housing market.
Biden opposed negotiations for months until Wednesday, when he said he would consider expanding some work requirements. But after backlash from Democrats, Biden said any expansion would be “nothing of consequence.”
The president left the U.S. Wednesday to attend the G-7 Summit in Japan.
Critical National Security Implications
The implications of default go beyond the consumer’s pocketbook. The world is watching, Perry said.
“China is probably whispering in the ear of all our allies saying, ‘look at America. They can’t get it together. They are intoxicated and addicted to debt. They can’t seem to solve the equation. They are divided, and you should look at the Chinese investments and the China model, and we’re your friends. Don’t keep hanging around with these crazy Americans.’ I think that’s what they’re saying.”
Perry believes the national security implications are critical.
“China, Russia and our adversaries are opposing us every single day in real ways. They’re mining in Ecuador. They are selling fuel, in disregard of the sanctions, to one another. They are investing in countries that are marginal, that are trying to decide which way to go,” Perry said. “Every moment that the United States isn’t keeping its eye on the ball, instead of actually building real things that promote prosperity abroad—we’re out teaching people about climate change, or some kind of woke program for diversity—while China’s installing a cell phone network. Which one do you think works?”
Perry says he does not recall the last time Congress cut spending meaningfully. Often, he says, items touted as savings are just a reduction of the increase rather than a reduction of the spending.
“We seek to change that. We have to have a real conversation. We can’t act like the money is never going to end and there’s no tomorrow, and no matter how much you print, no matter how much you borrow, no matter how much you spend, it doesn’t matter. It does matter. And nations have been in peril for this kind of thing,” Perry said. “Somebody has to be responsible. And apparently, it’s not the president or the default-Democrats.”
He suspects Democrats are holding firm on raising the debt limit without compromise to fund programs while they are in power.
“They want to institute those programs. Those programs cost money, and they want to enshrine them in funding and have them in place, embedded as deeply as possible, as quickly as possible, and they’re wed to those ideas that cost money. They think they can demand it, and the American people will just go along,” Perry said. “The American people are busy. They’re at work. They’re trying to pay their bills. They’ve got kids that they’re trying to get through school and keep on the right track. They don’t have time to babysit Washington, D.C., and certainly the Democrats know that.”
14th Amendment
Senate Democrats seemed unwilling to budge Thursday.A group of senators circulated a letter asking Biden to prepare to invoke the 14th Amendment in case Congress cannot reach a deal.
The 14th Amendment of the Constitution deals with public debt.
It says: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”
Senators John Fetterman (D-Pa.), Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Peter Welch (D-Vt.), Tina Smith (D-Minn.), and Ed Markey (D-Mass.) had signed the letter by Thursday afternoon.
“President Biden needs to consider using the 14th Amendment if necessary,” Fetterman said in a statement. “The entire GOP debt ceiling negotiation is a sad charade, and it’s exactly what’s wrong with Washington. We’re playing with fire and the livelihoods of millions just for the GOP to try and turn the screws on hungry Americans. This is the whole reason why the 14th Amendment exists, and we need to be prepared to use it. We cannot let these reckless Republicans hold the economy hostage. And, if our unelected Supreme Court Justices try to block the use of the 14th Amendment and blow up our economy, that’s on them.”
Fetterman announced his intention to cosponsor legislation led by Sen. Brian Schatz (D-Hawaii) that would repeal the debt ceiling once and for all, the statement said.
