By Holmes Lybrand
Once again, lawmakers are in a fight over the debt limit. Democratic leaders have called for suspending the debt ceiling through 2022 in order to keep the government open but Republicans staunchly oppose the legislation.
In a joint statement on Monday, Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer said it was necessary to raise the debt ceiling to cover expenses created under former President Donald Trump and meet “obligations the government has already made, like the bipartisan emergency COVID relief legislation from December.”
Minority Leader Kevin McCarthy has repeatedly criticized the Democrats for increasing the national debt while arguing that “every amount of money spent in the Trump administration was accounted for” during his presidency, he said at a press briefing Thursday.
On Tuesday, McCarthy told Fox News “(t)he past debt ceiling paid for everything in the Trump administration.”
Last week, he made a similar claim, telling Newsmax “we have paid for everything the Trump administration spent.”
Facts First: The claims from both sides are misleading and need context. Legislation signed into law by Trump added trillions to the national debt and just because the debt ceiling was previously raised doesn’t mean those policies were “paid for.” Furthermore, some of Trump’s legislation continues to add to the US deficit. But the need to increase the debt ceiling now is not primarily due to legislation passed under Trump.
Debt under Trump
The US government hasn’t run a fiscal surplus since 2001. Under President Trump, the deficit increased every single year and ballooned to more than $3 trillion in 2020 due to the government’s response to the pandemic.
Under Trump, the US debt increased by a total of $7 trillion and during his presidency Congress voted to increase the debt ceiling three times.
Most of what increased the national debt under Trump were bipartisan efforts, like Covid relief packages and increases in discretionary caps, Marc Goldwein, senior vice president for the nonpartisan Committee for a Responsible Federal Budget (CRFB), told CNN. “But it wasn’t paid for,” Goldwein said.
“They did raise the debt limit enough to accommodate all the borrowing that took place during his presidency,” Goldwein said, “but that doesn’t account for the borrowing that was enacted under President Trump that would take place subsequent to his presidency.”
For instance, the Tax Cuts and Jobs Act of 2017 — which Trump signed into law — is set to cost the US government $3 trillion through 2029, according to CRFB.
The total national debt now stands at about $28.5 trillion and is set to increase under Biden.
Debt under Biden
Goldwein told CNN that while “Trump is partially responsible for the deficit for 2021 and 2022…to suggest that it’s primarily a Trump deficit, I think is incorrect.”
“(A) significant portion of the deficit is from the American Rescue Plan that President Biden signed into law,” Goldwein added.
The American Rescue Plan came with a $1.9 trillion price tag and Democrats are currently working to pass Biden’s $1 trillion infrastructure legislation as well as a $3.5 trillion spending plan.
Until this legislation is finalized it’s unclear just how much of a deficit the government might run in the fiscal year of 2022. The Biden administration has said it plans to cover much of the cost of his agenda by increasing taxes on high earners and corporations.
Congress set a debt ceiling over a century ago to limit the amount of money the government borrowed. However, as CNN’s Zachary Wolf has noted, Congress has increased the debt limit every time it has been reached.
Analysts have warned that if the debt limit isn’t raised now it would likely result in a recession, with millions of jobs lost, the unemployment rate drastically rising along with a sharp drop in stock prices — to name a few of the potential outcomes.
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