Former President Donald Trump told Republican members of Congress to vote against a debt limit hike unless they get “massive cuts” to government spending in return, injecting himself into a contentious debate with existential consequences for the U.S. economy.
“I say to you right now, congressman, senators, if they don’t give you massive cuts, you’re gonna have to do a default,” Trump said at a CNN town hall event in New Hampshire on Wednesday night. “I don’t think they’re going to do a default because I think the Democrats will absolutely cave.”
“You don’t want to have it happen,” Trump said of a default. “But it’s better than what we’re doing right now because we’re spending money like drunken sailors.”
Trump’s comments could make it far more difficult for President Joe Biden and House Speaker Kevin McCarthy to reach an agreement. Trump’s support for the man he calls “my Kevin” was crucial to McCarthy cobbling together the votes to become speaker in January, and the GOP leader could struggle to put together the votes for any deal Trump opposes.
The McCarthy-led House narrowly passed legislation cutting $4.8 trillion in spending over the next 10 years in exchange for a debt limit hike, but the legislation has no chance of passage in the Senate or of earning Biden’s signature.
Biden has insisted on a clean debt limit hike and said McCarthy’s package would lead to devastating cuts to veterans’ benefits, education, border protection and safety net programs. (The Republican bill does not specify where cuts come from, and the GOP has insisted they will protect veterans if the legislation actually becomes law.)
A default would almost certainly and rapidly lead to a deep economic depression, economists say. The White House Council of Economic Advisers projects it would cause more than 8 million people to lose their jobs and the stock market to plunge nearly 50% in three months.
By pointing his finger at Biden for the nation’s debt, Trump also evades his own responsibility. While the story is complicated — much of the debt under Trump came from bipartisan legislation passed to help the country deal with the coronavirus pandemic, and Biden has benefited from the pandemic’s end — the debt still grew nearly $7.8 trillion under Trump, compared to $3.7 trillion so far under Biden.
As president, Trump warned against using the debt limit as a negotiating tool. Pressed by CNN’s Kaitlin Collins, the front-runner for the GOP nomination simply owned his hypocrisy.
“That’s true,” Trump said. “That’s when I was president.”
“So why is different now that you’re out of office?” Collins asked.
“Because now I’m not president,” he said, to laughter from the crowd of Republican voters at the town hall.