McConnell: ‘Not Concerned’ Debt Ceiling Fight Will Cause Financial Crisis

After the US hit its “debt ceiling” on Thursday, the Treasury adopted so-called “extraordinary measures” to keep paying the government’s debts, although they will only last a couple of months before an inevitable default occurs.

US Senate Minority Leader Mitch McConnell (R-KY) isn’t very concerned about the potential for the US government to default on its debts, he said on Thursday as the showdown over government spending entered a new stage.

“No, I would not be concerned about a financial crisis,” McConnell told reporters at an event in Kentucky, adding that raising the debt ceiling is “always a rather contentious effort.”

“In the end, I think the important thing to remember is that America must never default on its debt. It never has, and it never will,” he said. “We’ll end up in some kind of negotiation with the administration over what the circumstances or conditions under which the debt ceiling [will] be raised.”

His comments came after US Treasury Secretary Janet Yellen announced she had begun implementing “extraordinary measures” to keep paying certain essential payments, since Congress has failed to pass a new bill raising the $31.4 trillion debt ceiling in time.

The ceiling was created by Congress during World War I as a way to simplify war financing, but in recent years, conservatives have used it as a way to compel liberals to accept steep spending cuts to social programs they could not implement through typical legislative methods. One showdown in 2011 resulted in an agreement just hours before the US defaulted on its debt, triggering a downgrade of its credit rating.

McConnell is no stranger to such fights, having threatened a similar showdown in 2021, the last time the debt ceiling was raised. Instead, the GOP Senate chief hammered out a deal with Majority Leader Chuck Schumer (D-NY) for a quick vote, but pledged it would be the last time he would allow the Democrats to raise the ceiling.

This time around, though, it’s the newly minted Speaker of the House, Rep. Kevin McCarthy (R-CA), who’s pushing the fight. After a bitter factional struggle blocked his ascension to the speaker’s seat for days earlier this month, McCarthy wooed a group of far-right party dissidents by promising a showdown over the debt ceiling.

However, McCarthy has tried to frame the issue as a failure of the White House to reasonably negotiate with the Republican-controlled House. Bizarrely, so far he hasn’t presented any kind of list of demands for spending cuts.

“I would like to sit down with all the leaders and especially the president and start having discussions,” McCarthy said on Tuesday. “Who wants to put the nation through some type of threat at the last minute with the debt ceiling? Nobody wants to do that.”

Speaking to US media on Wednesday, he compared the Democrats to a child with a credit card who was spending money irresponsibly.

“If you had a child and you gave them a credit card, and they kept hitting the limit - you wouldn't just keep increasing it,” McCarthy said. “You'd first see what are you spending your money on? How can we cut items out?"