- Senate Majority Leader Chuck Schumer pushed back on House Republicans' debt ceiling legislation.
- He said the Senate will hold hearings on the narrowly-passed package, and it has no hope of becoming law.
- That means that both parties will likely have to go back to the drawing board to avert a crisis.
Senate Majority Leader Chuck Schumer is ready to put House Republicans' debt ceiling legislation on blast.
In a dear colleague letter, Schumer said that Senate committees will start holding hearings this week "to expose the true impact of this reckless legislation on everyday Americans." That includes a Senate Budget Committee hearing on Thursday.
Schumer also made explicit that the bill is essentially dead on arrival. Schumer, like House Democrats, is referring to the legislation as the "Default on America Act."
"The Republican Default on America Act does nothing to actually resolve the looming debt crisis, and it has no hope of ever becoming law," Schumer wrote. "If anything, the MAGA House Republicans actions have increased the likelihood of default."
Senate Democrats are showcasing that the the debt ceiling fight is far from over, a precarious situation as the country is mere months away from a potentially catastrophic default. Last week, Speaker of the House Kevin McCarthy just barely passed his Limit, Save, Grow Act of 2023 after making last-minute concessions to some members of his party. Even so, that package — which, among other cost reduction measures, would ban student-loan forgiveness and increase work requirements for access to welfare programs — didn't have every GOP member on board. No Democrats voted for the bill.
Democrats have pointed to the potential economic negative impact that the GOP's plan could have, even if it prevents a technical debt default. Schumer called it "hastily drafted," and said that the package would "gut" Medicaid for over 20 million Americans and leave over a million Americans without SNAP benefits, which have already been reduced in the wake of the pandemic.
And Moody's Analytics finds that the country could shed 780,000 jobs by the end of 2024 under the GOP bill, and that the bill's one year expiration provision could only exacerbate economic uncertainty by setting up another round of debt ceiling fighting just months before the 2024 elections. President Joe Biden has said he'll veto the bill if it ends up on his desk.
But more back and forth over how to raise the debt ceiling means the country is steadily creeping towards an unprecedented economic catastrophe. Even a short default could mean that nearly a million Americans lose their jobs and the country plunges into a mild recession by the end of the year, according to Moody's. A longer breach could cost 2.6 million jobs.
"As Democrats have been saying for months, the real solution is bipartisan support for a clean bill to increase the debt limit and avoid default," Schumer wrote. "Speaker McCarthy and the MAGA House Republicans have moved the process backwards through their far-right ransom note. We cannot move forward as long as Republicans threaten our country with default."