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House Oversight Committee chair urges spending cuts to avoid U.S. debt default

House Oversight Committee chair urges spending cuts to avoid U.S. debt default
© Reuters. FILE PHOTO: U.S. Representative James Comer Jr., R-Ky., speaks during a House Committee on Oversight and Reform hearing on gun violence on Capitol Hill in Washington, U.S. June 8, 2022. Andrew Harnik/Pool via REUTERS

WASHINGTON (Reuters) – House Oversight Committee Chairman James Comer said on Sunday he hoped a U.S. debt default could be avoided but put the onus on Democrats to agree to spending cuts being pushed by his fellow Republicans.

“We hope that this is avoided. We hope that the Senate, House – Democrats and Republicans – will agree to spending cuts. Look, this has to stop. We cannot continue to operate with these types of deficits,” Comer said in an interview with CNN.

Republicans now in control of the House of Representatives have threatened to use the debt ceiling as leverage to demand spending cuts from Democrats, who control the U.S. Senate, and the Biden administration.

This has raised concerns in Washington and on Wall Street about a bruising fight over the debt ceiling this year that could be at least as disruptive as the protracted battle of 2011, which prompted a brief downgrade of the U.S. credit rating and years of forced domestic and military spending cuts.

“So Republicans were elected with a mandate from the American people in the midterm elections. We campaigned on the fact that we were going to be serious about spending cuts,” Comer said in an interview with CNN’s “State of the Union.”

“So the Senate is going to have to recognize the fact that we’re not going to budge until we see meaningful reform with respect to spending.”

U.S. Treasury Secretary Janet Yellen said on Friday the United States will likely hit the $31.4 trillion statutory debt limit on Jan. 19, forcing the Treasury to start extraordinary cash management measures that can likely prevent default until early June.

Congress created the debt ceiling in 1917 to give the government greater borrowing flexibility, and must approve each increase to ensure that the United States meets its debt obligations and avoids a catastrophic default.

Source: Investing.com

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