White House says not raising debt limit halt 'billions of dollars' for state, federal programs

Rebecca Morin, USA TODAY
·2 min read
1

WASHINGTON – The Biden Administration is warning state and local governments that funding for disaster relief efforts, Medicaid and education could be in jeopardy if Congress does not raise the debt limit, according to a fact sheet released by the White House Friday.

“If Congress does not act before cash runs out, the U.S. will default for the first time in its history,” the fact sheet said.

Republicans on Capitol Hill oppose raising the debt limit. Senate Republican leader Mitch McConnell on Wednesday tweeted that it’s the Democrat’s “sole responsibility” to raise the debt limit. Congress is also in a crunch to put new spending in place for the next fiscal year, which begins Oct. 1, or there could be a government shutdown.

“With a Democratic President, a Democratic House, and a Democratic Senate, Democrats have every tool they need to raise the debt limit,” he tweeted. “It is their sole responsibility. Republicans will not facilitate another reckless, partisan taxing and spending spree.”

The debt ceiling is the total amount of money the U.S. is allowed to borrow at any given time, and covers all types of federal government debt, including spending on Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other expenditures.

More: As the gun control debate stalls, Medicaid becomes an unlikely tool to fight violence

During the Trump administration, the debt limit was suspended three times. Congress in August 2019 brokered a deal to suspend the debt limit for two years, after which the new limit would reset at the previous limit – $22 trillion along with any new spending in the intervening years. The limit was reinstated on Aug. 1 at around $28.5 trillion.

Treasury Secretary Janet Yellen has sent three letters to Congress warning them about the consequences for the financial markets if the debt ceiling isn’t raised or suspended.

'Prove you're a low-income student': After filing FAFSA, some college students are audited

“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,” Yellen wrote in a letter to House Speaker Nancy Pelosi on Sept. 8.

In the fact sheet to state and local governments, the White House outlined that multiple programs will be halted.

"If the U.S. defaults and can no longer pay its obligations, billions of dollars in state aid and state-run but federal funded programs could be halted," the fact sheet said.

The programs include:

  • Disaster relief efforts

  • Medicaid and the Children’s Health Insurance Program (CHIP)

  • Infrastructure funding

  • Education

  • Public health

  • Child nutrition, such as the national school lunch and breakfast programs, Women’s Infants and Children Program (WIC) and the Supplemental Nutrition Assistance Program (SNAP)

Contributing: Matthew Brown

Reach Rebecca Morin at Twitter @RebeccaMorin_

This article originally appeared on USA TODAY: White House says not raising debt limit will halt billions for states