AP Photo/J. Scott Applewhite
- McConnell says the US shouldn't neglect its debt obligations while insisting Republicans won't back raising the debt ceiling.
- He says Democrats can raise it on their own, which they have shot down.
- Treasury Secretary Yellen warned of a potential default in October that could cause "irreparable damage" to the economy.
- See more stories on Insider's business page.
Senate Minority Leader Mitch McConnell says the US shouldn't fail to service its growing national debt, while doubling down on his insistence that the GOP will oppose raising the debt ceiling.
"America must never default," the Kentucky Republican said in an interview with the Louisville Courier-Journal published Thursday.
He went on: "The debt ceiling needs to be raised. The issue is who should do it. And under these uniquely unprecedented circumstances, it's their obligation to do it. And they have the votes to do it, and they will do it."
McConnell's remarks underscored the brewing resistance among Republicans on renewing the nation's ability to pay its bills, known as the debt ceiling. The vast majority of Senate Republicans and a sizable portion of GOP lawmakers in the House say Democrats must lift the debt ceiling on their own in a social spending plan being drafted.
The GOP is on course to break with its past approach under President Donald Trump, given they struck deals with Democrats to raise or suspend the debt ceiling three times during his term. But a 2011 budget showdown between House Republicans and the Obama administration rattled financial markets and led to a downgrade in the US credit rating.
House Speaker Nancy Pelosi said Wednesday that Democrats will not include a debt ceiling increase in the $3.5 trillion party-line spending bill they're pushing through the reconciliation process. That path requires only a simple majority vote.
"We Democrats supported lifting the debt ceiling because it's the responsible thing to do," she said at a press conference, adding Congress would be paying off "the Trump credit card"
"I would hope that the Republicans would act in a similarly responsible way," she said.
Democrats may add the debt ceiling measure onto an emergency spending bill the White House wants Congress to approve to finance relief efforts after Hurricane Ida and a string of wildfires, and avert a government shutdown at the end of September. That tactic could persuade some Republicans to support the legislation.
The debt ceiling is the legal limit that the US can borrow to maintain federal operations, set by Congress. It was last suspended for two years in July 2019. Raising the debt limit doesn't increase the national debt.
Treasury Secretary Janet Yellen has urged lawmakers since June to raise the debt ceiling. But Congress barreled past a July 31 deadline to do so and the Treasury Department jumpstarted what it calls "extraordinary measures" to pay off the nation's bills for a short period of time.
Yellen warned Wednesday the US could default on its debt sometime in October if lawmakers don't act before then, a month earlier than expected.
"A delay that calls into question the federal government's ability to meet all its obligations would likely cause irreparable damage to the U.S. economy and global financial markets," she said in a letter to Congress.