Sen. Rick Scott (R-Fla.) suggested Tuesday it was “foolish” to buy U.S. Treasury bonds amid a standoff between Republicans and Democrats over raising the debt ceiling and President BidenJoe BidenHouse Democrat threatens to vote against party's spending bill if HBCUs don't get more federal aid Overnight Defense & National Security — The Pentagon's deadly mistake Haitians stuck in Texas extend Biden's immigration woes MORE’s sprawling economic agenda.
In a Tuesday briefing with reporters, Scott asserted that Republican lawmakers will not vote to avert a default on the national debt and expressed doubts that Democrats could win enough political support to pass new tax hikes to offset spending.
“If you buy Treasuries today, [you] don't understand that American taxpayers are not willing to raise taxes to pay for this,” Scott said, though polling has shown solid support for aspects of Biden’s tax plan
“If you're foolish enough right now to be buying this stuff, you're foolish,” he continued, implying Treasury bonds would likely decrease in value amid the standoff.
Scott’s comments come as Democrats and Republicans escalate a high-stakes standoff over the legal limit on how much debt the federal government can owe.
The debt ceiling was reimposed Aug. 1 and the Treasury Department has taken “extraordinary measures” to keep the U.S. solvent without borrowing more money. Yellen warned lawmakers last week that the Treasury could run out of cash and be unable to avert a default as soon as next month if Congress does not raise the debt ceiling.
Raising or suspending the debt ceiling does not authorize or ban any new spending on its own, nor does it increase or decrease the size of the national debt. Hiking the debt limit simply allows the U.S. to sell more Treasury bonds and generate cash to pay expenses already approved by Congress.
The U.S. has never defaulted on its debt and experts say any lapse in the full faith and credit of the federal government could trigger a financial system meltdown. Countries, financial institutions, and investors hold trillions of dollars in Treasury bonds that could plummet in value if the U.S. is unable to stay solvent.
Despite those risks, Republican lawmakers have insisted for months that Democrats bear responsibility for raising the debt ceiling because they have control of the House, Senate and White House.
“It’s their choice,” Scott said of Democrats when asked if he would be willing to raise the debt ceiling to avert a financial meltdown. “If they don't pay the debt, that's their decision.”
GOP Sens. Ron JohnsonRonald (Ron) Harold JohnsonGOP senator: Buying Treasury bonds 'foolish' amid standoff over debt ceiling, taxes Internal poll shows Barnes with 29-point lead in Wisconsin Democratic Senate primary Wisconsin Democratic Senate candidate facing 4 felony charges MORE (Wis.) and James LankfordJames Paul LankfordGOP senator: Buying Treasury bonds 'foolish' amid standoff over debt ceiling, taxes Florida senator seeks probe of Ben & Jerry's halting sales in Israeli settlements Senate Democrats try to defuse GOP budget drama MORE (Okla.), who also briefed reporters, echoed Scott’s opposition and pinned a potential default on Democrats.
“We put them on notice that we’re not going to raise the debt ceiling,” Johnson said. “They have all the power to do it.”
Democrats can only raise or suspend the debt ceiling without GOP support through budget reconciliation, the process through which they plan to pass a multitrillion infrastructure, social services and tax-hike bill. A standalone bill to raise the debt ceiling would need the support of at least 10 Republican senators to overcome a filibuster if no Democrats are opposed.
Democratic leaders have refused to tie a debt ceiling increase to their spending bill, arguing that Republicans must be involved in suspending the debt limit after adding more than $2 trillion to the debt with former President TrumpDonald TrumpOvernight Defense & National Security — The Pentagon's deadly mistake Overnight Energy & Environment — Presented by Climate Power — Interior returns BLM HQ to Washington France pulls ambassadors to US, Australia in protest of submarine deal MORE’s tax cut law. A squabble over any part of the massive spending plan could also delay the debt ceiling hike attached to the bill beyond the point at which the U.S could default.
“The United States has never—ever—defaulted on paying its debts. I can’t imagine Republicans would want to be responsible for the first-ever default,” said Senate Majority Leader Charles SchumerChuck SchumerBiden discusses agenda with Schumer, Pelosi ahead of pivotal week CEOs urge Congress to raise debt limit or risk 'avoidable crisis' If .5 trillion 'infrastructure' bill fails, it's bye-bye for an increasingly unpopular Biden MORE (D-N.Y.).
Scott, Johnson and Lankford would not say if they were comfortable with the potential implications of the U.S. defaulting. They also refused to say if they would rather the U.S. default without a congressional breakthrough, or vote for a bill that would keep the U.S. solvent.
But Scott, the chairman of the Senate Republican campaign arm, expressed confidence that Democrats would face the political blowback from a default.
“If the Democrats don't do their job, I guess it will be political blowback for them,” he said.