- Trump suggested that Republicans risk the US and global economy if Biden doesn’t give in to their demands.
- The former president said the GOP would “have to do a default” if more spending cuts don’t accompany a debt limit increase.
- Trump predicted such a move wouldn’t be needed though.
Former President Donald Trump told congressional Republicans on Wednesday evening that they should risk the stability of the US and global economy by defaulting on the nation’s debt unless “massive” spending cuts are passed in exchange.
“I say to the Republicans out there, congressmen and senators, if they don’t give you massive cuts you are going to have to do a default,” Trump said during CNN’s GOP primary town hall in New Hampshire.
The former president then predicted that a default would not be necessary because “the Democrats would absolutely cave.”
“But it’s better than what we are doing right now because we are spending money like drunken sailors,” Trump said.
CNN anchor Kaitlan Collins then clarified with Trump if he was indeed directing the GOP to default on the debt by refusing to raise the debt ceiling if President Joe Biden and Democrats do not agree to large spending cuts.
Trump responded, “You might as well do it now because you’ll have to do it later.”
As soon as early next month, the Treasury Department will no longer be able to use special measures to delay breaching the debt ceiling. At that point, the US government will be unable to pay its bills. The debt ceiling does not authorize new spending, but lawmakers, especially conservatives, often tie an increase in the debt limit to spending cuts.
The former president’s comments are particularly striking as both parties traditionally try to avoid blame for a debt ceiling standoff. House Speaker Kevin McCarthy has argued that the current issue is that Biden will not negotiate more with him. The White House has repeatedly said that Biden would only accept an increase or suspension of the debt ceiling if it came without conditions.
Economists have long feared that a default would send the US economy into a tailspin with repercussions felt around the globe. Analysis from the White House Council of Economic Advisers has said that it could be as bad as the Great Recession and could shed up to 8.5 million jobs if a worst-case-scenario drawn-out default happened.
Even the possibility of default in 2011 led to a historic downgrade of the US’s credit rating.