Biden warns Republicans will ‘crash the economy’ as they vow to use debt limit to force spending cuts

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President Biden warned Friday that if Republicans win a congressional majority in next month’s midterm elections, they will “crash the economy” by keeping the debt limit high to secure spending cuts while targeting the two main entitlement programs : Medicare and Social Security.

House Minority Leader Kevin McCarthy (R-Calif.), who could become Speaker if the GOP wins the House, hinted this week that his party would be willing to use a debt ceiling hike as leverage to force policy changes . McCarthy didn’t rule out including Medicare and Social Security in the calculation as Republicans seek to cut federal spending.

Those comments — along with McCarthy signaling that House Republicans would oppose more aid to Ukraine — gave Biden new arguments he could use to argue that voters left Democrats in the midterm elections by just over two weeks leading up to election day should support.

“If you’re concerned about the economy, you need to know that this Republican leadership in Congress has made it clear that they will crash the economy next year by threatening the full confidence and creditworthiness of the United States,” he said he at the White House on Friday. “For the first time in our history, we are defaulting on the United States unless we give in to their demands to cut Social Security and Medicare.”

The debt limit is the total amount the government is allowed to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, among other priorities. It must be lifted next year to protect the country’s creditworthiness and prevent the United States from defaulting on its debt.

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“Let me be really clear,” Biden added. “I will not give in. I’m not going to cut Social Security. I will not cut Medicare no matter how hard they work. And folks, we know what the Republican Congress is going to do when it comes back to power. They tell us to be open about it.”

The President made the remarks as he welcomed the news that the US government’s annual deficit fell to about $1.4 trillion in 2022 from $2.8 trillion in 2021, describing it as “the largest one-year decline in the US.” American history”.

Trying to contrast his economic responsibilities with those of Republicans, Biden warned that tax cuts and other promised policy changes could push the deficit back up.

“It’s a mega MAGA trickle-down,” Biden said, “the kind of policy that has failed the country before and will fail again.”

McCarthy had hinted that Republicans would use the debt ceiling hike in negotiations with the Biden administration.

“You can’t just keep spending and adding to the debt,” he said in a recent interview with Punchbowl News. “And if people want to do a debt ceiling [for a longer period of time]just like everything else, there will come a time when we will give you more money, but you need to change your current behavior.

“We’re not just going to keep increasing your credit card limit, are we?” the lawmaker added. “And we should seriously sit down and [figure out] Where can we eliminate some waste? Where can we strengthen the economy?”

McCarthy said he would not “predetermine” anything as he pressed whether changes to entitlement programs like Medicare and Social Security were part of the debt ceiling discussions. Sen. Ron Johnson (R-Wis.) previously proposed eliminating Social Security and Medicare as state entitlement programs. And Sen. Rick Scott (R-Fla.) has proposed “suspending” all federal programs after five years, meaning they would expire if not renewed.

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In his Friday comments, Biden also predicted voter sentiment would shift toward Democrats in the final days leading up to next month’s midterm elections, saying he believes his party “will do well.”

His comments to reporters in the White House come as recent polls have shown a more favorable environment for Republicans in Congress than a few weeks ago, with more voters saying economic issues are key to their election.

“I think this: It’s a back and forth,” Biden said. “The polls were everywhere. I think we will see another shift back to our side [in] the closing days.”

He hinted that several “good economic news stories” would resonate with voters, including falling gasoline prices, lower unemployment rates and the US government’s record-breaking deficit.

“The new deficit numbers, there’s a record, a record decline,” Biden said. “It’s never happened before. The election is not a referendum. It’s a choice. It’s a choice. And the Republicans criticized my economic record. But look at what I inherited and what I did and look at what they offered me.”

“This is the choice we face,” he added. “So I think we’re going to do well.”

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