Donald Trump told congressional Republicans to play “tough” on raising the federal debt limit later this year, stoking sentiment in the GOP for a potentially market-rattling showdown in order to pressure Democrats on spending cuts.
(Bloomberg) — Donald Trump told congressional Republicans to play “tough” on raising the federal debt limit later this year, stoking sentiment in the GOP for a potentially market-rattling showdown in order to pressure Democrats on spending cuts.
The former president has seen his influence slip with Republicans but has been using last week’s protracted leadership struggle in the House and divisions within the GOP to reassert himself.
The danger of a debt crisis that could bring the US to the brink of default already has ratcheted up with hard-line conservatives gaining influence in a fractious and narrow majority. They have been using their votes to pressure newly elected House Speaker Kevin McCarthy to use the debt ceiling as leverage in a fight over government spending.
Trump said in a post on his Truth Social network that Republicans would be able to reverse “almost everything” Democrats accomplished in two years of majority rule by threatening a debt default. Such a confrontation would be “a beautiful and joyous thing,” he added, without specifying what he wanted to get back in return.
He also used the post to again slam Senate Republican leader Mitch McConnell, accusing him of giving in to Democrats.
Economists estimate the US will hit the legal debt limit some time in the third quarter. A battle over the debt ceiling between House Republicans and the Democratic White House in 2011 took the nation to the brink of default, triggering a downgrade in Treasury debt and a slide in US stocks.
Trump signed three debt limit increases or suspensions while in office, which allowed the nation’s red ink to swell by nearly $8 trillion.
–With assistance from Steven T. Dennis.
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