Rep. Jim Banks: Debt restrict could be “main leverage level” for Home GOP majority

Washington — Republican Rep. Jim Banks of Indiana signaled Thursday that the GOP might use the looming debt restrict as a negotiation software with President Biden early subsequent yr ought to the celebration win again the bulk within the Home in November’s elections. 

“It is a main leverage level for the Home Republican majority to make use of to regulate spending,” Banks stated. “We have seen the nationwide debt now surpass $31 trillion. It’s a key driver of inflation.”

Whereas some Republicans view the debt restrict as a method to assist rein in spending, failure to lift or droop the debt ceiling in a well timed method might trigger the U.S. to default on its debt, which might have devastating penalties for the financial system.

Banks, who’s broadly seen as a contender to develop into majority whip ought to Republicans retake the Home majority, made the remarks in an interview with CBS Information chief elections correspondent Robert Costa at a Paramount Authorities Relations occasion.

“We have now to make use of a second like that to do issues that the administration would not in any other case do, the Democrats do not help,” Banks stated. He stated spending caps, balanced budgets and chopping wasteful discretionary spending need to be on the desk.

“I believe Republicans are uniformly in help of utilizing that second as a chance to do one thing about spending,” he added.

The nationwide debt has surpassed $31 trillion, in keeping with a Treasury report launched early this month, nearing the roughly $31.4 trillion debt restrict. On the similar time, the U.S. is grappling with 40-year-high inflation and rising rates of interest which can make the nation’s debt extra pricey. 

Rep. Jim Banks, R-Ind., is interviewed by CBS Information chief Election & Marketing campaign correspondent Robert Costa, Oct. 20, 2022, Washington, D.C.

CRAIG HUDSON / CBS Information

The present restrict is anticipated to cowl borrowing into early subsequent yr, however the actual date the U.S. authorities would run out of cash to pay its payments — the so-called “X date” — just isn’t but clear. 

“I do not know why we will not come collectively to deal with spending points, and the debt restrict is a critical time to deliver us collectively, each events, the White Home and the Congress to search out options,” Banks stated. 

Lower than a yr in the past, Congress raised the debt restrict by $2.5 trillion in a party-line vote after months of negotiating. Treasury Secretary Janet Yellen warned on the time that going into default could be catastrophic for the U.S. financial system. 

Even when Congress has been in a position to finally attain a deal, the specter of a default has penalties. In 2011, S&P downgraded the U.S. authorities credit standing to AA+. It was the primary time the U.S. was given a score beneath AAA. The downgrade got here simply days after the Republican managed Congress raised the debt restrict. 

Throughout Thursday’s dialog, Banks additionally left the door open for impeachment proceedings towards Biden administration officers ought to Republicans retake the Home. Banks stated there could be a “vigorous oversight agenda.”

“If these investigations and oversight initiatives result in different programs of motion like impeaching Secretary Mayorkas, I can not predict that at this level,” Banks stated, referring to Homeland Safety Secretary Alejandro Mayorkas. 

Banks additionally instructed the GOP would search to rein in monetary help for Ukraine. He stated he didn’t count on help to be utterly shut off, however famous that People need the federal government to deal with home points earlier than fixing issues world wide. 

“Whereas America is on its knees, we will not present clean checks to the remainder of the world,” Banks stated. “It consists of Ukraine and the remainder of the world.”

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