Washington, D.C. – The federal government will be unable to meet its spending obligations – including Medicare and Social Security benefits – as soon as June because Treasury will have exhausted its “extraordinary measures,” according to a new letter by Treasury Secretary Janet Yellen to Congress. House Committee on Ways and Means Chairman Jason Smith (MO-08) issued the following statement:
“President Biden’s runaway spending and refusal to negotiate with Republicans in good faith is threatening seniors who rely on their Social Security checks to buy groceries and pay rent. Democrats’ Inflation Reduction Act spent so much on special interest tax breaks for the wealthy and big corporations that make over $1 billion in sales, that we are now being told Treasury may be unable to cover vital programs like Social Security and Medicare come June. Republicans did their part to make sure the bills for these programs continue to get paid well beyond next month by passing the Limit, Save, Grow Act, which will prevent this crisis, cut spending, and grow the economy, yet President Biden is doing nothing. He has no plan that can pass either chamber of Congress and is only increasing the likelihood of disaster by refusing to negotiate and figure out a plan which can avert this looming crisis.”
Background on the Debt Ceiling:
- The current debt ceiling—set at $31.4 trillion—was reached on January 19, 2023.
- Treasury is financing the government on a temporary basis using “extraordinary measures,” but those measures run out later this year, which CBO warns may be as soon as June.
- Over 60 percent of Americans want Congress to restrain future spending through the debt ceiling – and Republicans agree. We will not allow Democrats’ inaction to threaten default and harm seniors, military members, or veterans.
- Ways and Means Republicans passed the Default Prevention Act in early March to ensure that Treasury could open new lines of credit in order to pay principal and interest on the debt as well as pay benefits for Social Security, Medicare, and veterans. Democrats opposed the bill.
- Contrary to Democrat fear mongering, attaching spending restraints and reforms to an increase in the debt ceiling has been done numerous times in the past. President Biden voted for such agreements when he was a senator and negotiated them when he was Vice President.
- House Republicans took action and passed the Limit, Save, Grow Act, which protects taxpayers by cutting hundreds of billions of dollars in special interest green energy handouts that are flowing into the pockets of the wealthy, the Chinese Communist Party, and billion-dollar corporations. It also adds work requirements that break the cycle of poverty and end the chronic labor shortage.
- The longer President Biden refuses to join Republicans at the negotiating table, the closer he is pushing America’s economy toward default and disaster.