Top Republican on House Budget Committee misleads on debt ceiling

The top Republican on the House Budget Committee launched a wildly dishonest attack on the Democratic majority, during Tuesday’s floor debate on legislation to avert a catastrophic debt default.

Missouri Rep. Jason Smith gave a floor speech opposing legislation that will raise the nation’s debt limit by $480 billion — likely enough to allow the U.S. Treasury to avoid defaulting until at least December — suggesting doing so was somehow corrupt.

“I am glad that I decided to wear my boots today, because it’s getting deep in the swamp up here today listening to the garbage on the other side of the aisle,” he began, scolding Democrats for wanting to invest trillions in physical and human infrastructure and for pushing to raise or eliminate the debt ceiling — two unrelated matters.

“This is the Democrat [sic] Party! They do not believe there should be no limit [sic] in debt,” Smith claimed. “They said the on the floor, but that is not what the American people want.”

The speech came before Smith and every other House Republican present voted against the debt ceiling legislation.

A September report from Moody’s Analytics predicted a debt default could cost the nation up to 6 million jobs, reduce household wealth by close to $15 trillion, and increase the unemployment rate from about 5% to 9% nationally, but not a single Republican in Congress backed even this temporary solution.

Raising the debt ceiling does not increase spending at all. As the Treasury Department explains, it merely allows the government to pay for the spending Congress has already approved and the interest on the more than $28.7 trillion the department has borrowed to cover those prior expenses.

Instead of raising the statutory cap, Smith argued, Democrats should simply cancel approved spending he dislikes — specifically the remainder of President Joe Biden’s American Rescue Plan.

“If you want to raise the debt $480 billion until December, guess what? Listen to the White House,” he demanded. “Just last week the White House said there’s $480 billion of unobligated funds from your Biden bailout bill from March. Use that!”

In September, the Treasury Department reported it has spent about $700 billion of the more than $1 trillion it was responsible for managing under the pandemic relief legislation.

But Smith’s idea wouldn’t work. That’s because the unspent funds are not all set to be spent in the next few weeks. Billions, for example, are not set to be delivered until next May. Thus, canceling those appropriations would not impact the expected spending and deficit between now and December.

He also inaccurately claimed that the vote gives Democrats “a bigger runway to continue their RECKLESS spending” and that avoiding a debt default will mean “480 billion more dollars that will fuel” the “crises” on the border, in Afghanistan, with inflation, and with energy.

In reality, the money will allow the Treasury to keep paying for the nearly $8 trillion borrowed during Donald Trump’s administration, according to a ProPublica analysis, along with the rest of the nation’s debt.

Smith helped rack up a significant portion of that debt, including by voting for the 2017 Tax Cut and Jobs Act. That legislation, which slashed tax rates for corporations and wealthy Americans, increased the national debt by an estimated $1.8 trillion.

Thanks to the unanimous support by House and Senate Democrats, the temporary debt ceiling legislation will now go to Biden for his signature. But Republicans have already said they will do everything possible to block another increase in December.

Published with permission of The American Independent Foundation.