Why does Trump suddenly care about the US debt ceiling?

As the US Congress scrambles to come up with a spending bill to avoid a government shutdown, US President-elect Donald Trump has shocked many lawmakers by demanding that any such bill must also increase the country’s debt ceiling.

He insisted that any agreement must include this provision for the debt ceiling, which is the legislative limit on the amount of national debt that the country can assume. It was not an issue Discussed by either party.

Trump then went further, declaring, To the surprise of many lawmakersHe is also seeking to suspend or eliminate the debt limit before he takes office in January.

However, Trump’s plans suffered a setback on Friday night when the Republican-controlled US House of Representatives approved it Legislation passed That would avoid a midnight government shutdown, but he ignored his demand for an increase in the debt ceiling.

So why is Trump suddenly concerned about the debt ceiling?

What is the debt ceiling?

The debt ceiling is the maximum borrowing in the country. If the government needs to borrow more than this amount, it must obtain Congressional approval To do this.

Because the government was running a growing deficit — spending more money than taxpayer revenues it generated — it regularly needed to borrow money and raise the debt limit.

These funds are needed so that the government can meet its existing legal obligations, including paying Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other payments.

Many economists have predicted dire consequences as a result of a default, which could include a downgrade in credit ratings, a negative impact on borrowing and the dollar, potential devastation in financial markets and job losses in the thousands, if not millions – all of which could lead to catastrophic consequences. Lead to stagnation.

Why is it so political?

Almost since its inception in 1917, the debt ceiling has been politicized by both parties, but from 2011 onward, it has become not only partisan but fraught, says Laura Blessing, an assistant professor and senior fellow at Georgetown University’s Institute of Governmental Affairs.

The biggest problem with the ceiling, according to some observers, is that it has become a dangerous political bargaining chip that makes the economy hostage to extracting political demands.

“The pattern has been that the GOP enjoys using this as a cudgel to try to force Democrats to reach a legislative deal that will cut spending, which is their policy priority,” Blessing said. “And they have not been particularly successful at doing so“.

What does Trump say about the debt ceiling?

On Wednesday, Trump said in a joint statement with Vice President-elect J.D. Vance, “Increasing the debt ceiling is not significant, but we would prefer to do it under Biden’s supervision.”

“If Democrats won’t cooperate on the debt ceiling now, what makes anyone think they will do so in June during our administration?”

The next day, Trump spoke to several US media outlets, warning of a government shutdown unless Congress extended the debt ceiling or eliminated it entirely. In an interview with NBC News, Trump said getting rid of the debt ceiling entirely would be “the smartest thing (Congress) could do. And I would fully support that.”

“The Democrats said they want to get rid of him,” Trump said. “If they want to get rid of him, I will lead the charge.”

On Friday, Trump took to his social media platform Truth Social to post: “Congress should get rid of this ridiculous debt ceiling, or maybe extend it through 2029. Without this, we should never reach a deal. Remember the pressure.” Who’s the boss?”

True, some Democrats have supported eliminating the debt ceiling, including Massachusetts Sen. Elizabeth Warren, who said Thursday in a social media post that she agrees with Trump “that Congress should end the debt ceiling and never again rule hostage-holding.” “.

But many Republicans have been steadfast in their support of the debt ceiling. That’s why Trump’s comments are what Blessing calls a “record-breaking moment,” because he’s asking Republicans to abandon this tool.

“This is completely inconsistent with the messaging,” she said. “The policy attempts and the strategy they were using.”

So why does Trump want to cancel the debt ceiling?

As Trump prepares to push his tax cuts and border security agenda, Trump fears that next year’s debt control battle could conflict with his plans, which… It is expected to cost trillions of dollarsWritten by New York Times reporter Alan Rapport, who reported on the debt limit battles during the Trump and Biden administrations.

“This has nothing to do with serious political ideology and everything to do with power,” said Todd Belt, a professor and program director at George Washington University’s Graduate School of Political Management in Washington, D.C.

He said Republicans like to have a debt ceiling so they can force concessions and cut spending when they are in the minority.

“But they fear that when things are the other way around, when Republicans have the majority, Democrats will be able to use that to thwart the tax cuts that Donald Trump wants to push.”

These tax cuts and Trump’s other spending priorities will mean less federal money to cover the debt, which is why Trump wants to remove the debt limit, Belt said, noting that the reason the president-elect has to do this now is because he is not doing so. I don’t want to be blamed for being a free spender.

“He wants to be able to say this is something Joe Biden signed, not me.”

Does this mean the debt ceiling is doomed to fail?

Maybe not anytime soon.

While Trump and a handful of Democrats have called for its removal, there doesn’t appear to be much political will or votes to repeal it, Belt said.

“In addition, there are hard-line Republicans who want to continue with the debt ceiling because they truly believe they were sent to D.C. to radically change the system and stop all the excessive spending,” he said.