Washington — Republican Rep. Jim Banks of Indiana signaled Thursday that the GOP may use the looming debt restrict as a negotiation software with President Biden early subsequent yr ought to the occasion win again the bulk within the Home in November's elections.
"It is a main leverage level for the Home Republican majority to make use of to manage spending," Banks mentioned. "We have seen the nationwide debt now surpass $31 trillion. It's a key driver of inflation."
Whereas some Republicans view the debt restrict as a method to assist rein in spending, failure to lift or droop the debt ceiling in a well timed method may trigger the U.S. to default on its debt, which might have devastating penalties for the economic system.
Banks, who's broadly seen as a contender to turn into majority whip ought to Republicans retake the Home majority, made the remarks in an interview with CBS Information chief elections correspondent Robert Costa at a Paramount Authorities Relations occasion.
"We've to make use of a second like that to do issues that the administration would not in any other case do, the Democrats do not assist," Banks mentioned. He mentioned spending caps, balanced budgets and chopping wasteful discretionary spending need to be on the desk.
"I believe Republicans are uniformly in assist of utilizing that second as a chance to do one thing about spending," he added.
The nationwide debt has surpassed $31 trillion, in accordance with a Treasury report launched early this month, nearing the roughly $31.4 trillion debt restrict. On the identical time, the U.S. is grappling with 40-year-high inflation and rising rates of interest which can make the nation's debt extra expensive.
The present restrict is predicted to cowl borrowing into early subsequent yr, however the precise date the U.S. authorities would run out of cash to pay its payments — the so-called "X date" — just isn't but clear.
"I do not know why we won't come collectively to handle spending points, and the debt restrict is a severe time to convey us collectively, each events, the White Home and the Congress to search out options," Banks mentioned.
Lower than a yr in the past, Congress raised the debt restrict by $2.5 trillion in a party-line vote after months of negotiating. Treasury Secretary Janet Yellen warned on the time that going into default can be catastrophic for the U.S. economic system.
Even when Congress has been in a position to finally attain a deal, the specter of a default has penalties. In 2011, S&P downgraded the U.S. authorities credit standing to AA+. It was the primary time the U.S. was given a ranking beneath AAA. The downgrade got here simply days after the Republican managed Congress raised the debt restrict.
Throughout Thursday's dialog, Banks additionally left the door open for impeachment proceedings in opposition to Biden administration officers ought to Republicans retake the Home. Banks mentioned there can be a "vigorous oversight agenda."
"If these investigations and oversight initiatives result in different programs of motion like impeaching Secretary Mayorkas, I am unable to predict that at this level," Banks mentioned, referring to Homeland Safety Secretary Alejandro Mayorkas.
Banks additionally prompt the GOP would search to rein in monetary assist for Ukraine. He mentioned he didn't count on support to be fully shut off, however famous that People need the federal government to handle home points earlier than fixing issues all over the world.
"Whereas America is on its knees, we won't present clean checks to the remainder of the world," Banks mentioned. "It consists of Ukraine and the remainder of the world."