WASHINGTON (Reuters) – U.S. President-elect Donald Trump said on Sunday the 2023 debt extension agreed to 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 until Jan. 1, 2025. The US Treasury will be able to pay its bills a few months beyond that deadline, but Congress will deal with the issue, possibly by mid-year.
In a letter on Social Truth, Trump said, “The expansion of the Debt Ceiling by the former Speaker of the House, a good man and a friend of mine … will go down as one of the stupidest political decisions made in years.”
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He added, “Democrats must be forced to vote on this phony issue NOW, during the Biden administration, not in June. They should be blamed for this potential disaster, not the Republicans!”
Republicans, however, will control both chambers of Congress as of January 3 and at least some of the party's lawmakers will have to agree to a debt limit increase or repeal to become law.
Without the 2023 debt ceiling increase, the United States would have seen a historic default on its debt payments that would have sent shockwaves through global financial markets.
A credit default could also cause a decline in the US credit rating, raising the cost of borrowing for businesses and individuals.
At the time, several far-right Republicans in the House of Representatives had pushed for federal spending cuts as a condition of raising the debt limit more than had been negotiated.
About a week ago, with funding from the US government due to expire on December 20, Trump, encouraged by billionaire Elon Musk, demanded that the debt limit be eliminated or extended, possibly to 2029 when his presidency will end.
That idea was included in the federal budget expansion in March, but was quickly voted down by a coalition of House Democrats and hard-line Republicans, many of whom represent districts in Trump-leaning states.
A bill to finance the government without the debt limit provision was then enacted.
Next month, Republicans in the newly elected Congress are expected to push for deep federal spending cuts as a condition for raising the nation's borrowing limit.
Democrats earlier this month argued that Trump's call to immediately raise or eliminate the debt limit was motivated by his desire to make room for a new round of tax cuts that would likely reduce revenue and thus add more to the debt.
The national debt currently stands at approximately $36.1 trillion due to the levels of government spending and tax cuts that have been enacted over several decades.
(Reporting by Jasper Ward and Richard Cowan; Editing by Don Durfee and Chris Reese)
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