The article discusses the Republican party's unprecedented decision to raise the US debt limit by approximately $5 trillion, a move that sharply contrasts with their past emphasis on fiscal conservatism. This significant increase, achieved through the budget reconciliation process, allows them to bypass bipartisan support.
While economists generally welcome relief from the recurring debt limit brinkmanship, concerns remain regarding the long-term fiscal implications. Pairing this massive debt-ceiling increase with substantial tax cuts will add trillions to the national debt over a decade. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, criticizes this approach, highlighting the departure from previous efforts to link debt ceiling increases with debt reduction.
The significant debt limit increase has not been universally accepted within the Republican party. Some lawmakers have expressed reservations and potential opposition if the final bill includes such a substantial increase in borrowing authority.
The national debt is nearing $37 trillion. The Senate Republican proposal suggests a debt limit increase of $5.1 trillion, exceeding the $4 trillion increase approved by the House Republicans. This increase is expected to extend the government's borrowing capacity into 2028.
For years, Republicans have warned about the government’s reliance on borrowed money to pay its bills. That stance has often led to standoffs over raising the nation’s borrowing cap, with Republicans insisting that any increase in America’s so-called debt limit be paired with spending reductions.
This year, the party of fiscal conservatism is poised to discard that philosophy as Republicans prepare to press ahead with domestic policy legislation that combines nearly $4 trillion in tax cuts with a $5 trillion increase to the debt limit. An increase of that magnitude would be a record and underscore the ideological flexibility that many Republicans are willing to embrace when they are in power.
G.O.P. lawmakers are prepared to push through the debt limit increase with only votes from their party, through a budget process called reconciliation. That is making it harder for Republicans to maintain their fiscal hawk credibility, prompting some resistance from a few lawmakers who have warned that they may not vote for the bill if it includes such a large increase in the borrowing cap.
The national debt is approaching $37 trillion. This week, Senate Republicans unveiled legislation that would raise the debt limit by $5.1 trillion, higher than the $4 trillion increase that House Republicans voted for in their bill last month. Such an increase would likely extend the nation’s ability to borrow into 2028.
Most economists and analysts welcome a reprieve from debt limit brinkmanship that has destabilized the economy in recent years. However, raising the debt limit along with legislation that is projected to add $3 trillion to the national debt over a decade suggests that lawmakers are overlooking the nation’s long-term fiscal problems.
“The most stunning thing is that this massive debt-ceiling increase would be paired with a massive increase in new borrowing, whereas in the past the pressure has been to couple them with debt decreases,” said Maya MacGuineas the president of the bipartisan Committee for a Responsible Federal Budget.
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