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 BidenFord to bolster electric vehicle production in multi-billion dollar push Protesters demonstrate outside Manchin's houseboat over opposition to reconciliation package Alabama eyes using pandemic relief funds on prison system 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 JohnsonBiden sidesteps GOP on judicial vacancies, for now The Hill's Morning Report - Presented by Alibaba - Democrats argue price before policy amid scramble Liberal group launches campaign urging Republicans to support Biden's agenda MORE (Wis.) and James LankfordJames Paul LankfordBiden sidesteps GOP on judicial vacancies, for now COVID faith: Are your religious views 'sincerely held'? Overnight Defense & National Security — Presented by AM General — Afghan evacuation still frustrates 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 TrumpJan. 6 committee chair says panel will issue a 'good number' of additional subpoenas Overnight Defense & National Security — Presented by AM General — Pentagon officials prepare for grilling Biden nominates head of Africa CDC to lead global AIDS response 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 SchumerObama says US 'desperately needs' Biden legislation ahead of key votes Congress shows signs of movement on stalled Biden agenda Schumer gets shoutout, standing ovation from crowd at Tony Awards 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.