President Biden warned Friday that if Republicans seize the congressional majority in next month’s midterm elections, they will “crash the economy” by holding up the debt limit to extract spending cuts while targeting the two main entitlement programs: Medicare and Social Security.
House Minority Leader Kevin McCarthy (R-Calif.), who could become speaker if the GOP wins the House, suggested this week that his party would be willing to use an increase in the debt limit as leverage to force policy changes. McCarthy did not rule out including Medicare and Social Security in the calculation as Republicans look to reduce government spending.
Those comments — along with McCarthy signaling that House Republicans would be resistant to more aid for Ukraine — gave Biden new issues to cite in making the case that voters should back Democrats in the midterms, with just over two weeks to Election Day.
“If you’re worried about the economy, you need to know this Republican leadership in Congress has made it clear they will crash the economy next year by threatening the full faith and credit of the United States,” he said Friday from the White House. “For the first time in our history, putting the United States in default unless we yield to their demand to cut Social Security, Medicare.”
The debt limit is the total amount of money that the government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, among other priorities. It will need to be lifted next year to protect the country’s credit score and to prevent the United States from defaulting on its debt.
“Let me be really clear,” Biden added. “I will not yield. I will not cut Social Security. I will not cut Medicare, no matter how hard they work. And folks, we know what the Republican Congress will do if they regain power. They’re telling us to be straight up about it.”
The president made the remarks as he hailed the news that the U.S. government’s annual deficit plummeted from $2.8 trillion in 2021 to roughly $1.4 trillion in 2022, touting it as “the largest one-year drop in American history.”
Biden sought to draw a contrast between his economic stewardship and that of Republicans, warning that tax cuts and other promised policy changes could drive the deficit back up.
“It’s mega-MAGA-trickle down,” Biden said, “the kind of policies that have failed the country before and will fail it again.”
McCarthy had indicated that Republicans would use the debt limit increase in negotiations with the Biden administration.
“You can’t just continue down the path to keep spending and adding to the debt,” he told Punchbowl News in a recent interview. “And if people want to make a debt ceiling [for a longer period of time], just like anything else, there comes a point in time where, okay, we’ll provide you more money, but you got to change your current behavior.”
“We’re not just going to keep lifting your credit card limit, right?” the lawmaker added. “And we should seriously sit together and [figure out] where can we eliminate some waste? Where can we make the economy grow stronger?”
McCarthy said he would not “predetermine” anything when pressed on whether changes to entitlement programs such as Medicare and Social Security were part of the debt ceiling discussions. Sen. Ron Johnson (R-Wis.) previously suggested that Social Security and Medicare be eliminated as federal entitlement programs. And Sen. Rick Scott (R-Fla.) has proposed “sunsetting” all federal programs after five years, meaning they would expire unless renewed.
In his comments Friday, Biden also predicted that voter sentiment would shift toward Democrats in the closing days before next month’s midterm elections and said he believes his party is “going to do just fine.”
His remarks to reporters at the White House come as recent polls have shown a more favorable environment for congressional Republicans than a few weeks ago, with more voters saying economic issues are key to their choices.
“Here’s what I think: It’s back and forth,” Biden said. “The polls have been all over the place. I think that we’re going to see one more shift back to our side [in] the closing days.”
He suggested that several pieces of “good news on the economy” would resonate with voters, including dropping gas prices, lower unemployment rates and the record decrease in the U.S. government’s deficit.
“The new deficit numbers, there’s a record, a record decrease,” Biden said. “It’s never happened before. The election is not a referendum. It’s a choice. It’s a choice. And the Republicans criticized my economic record. But look at what I’ve inherited and what I’ve done, and look at what they’ve offered.”
“That’s the choice we’re facing,” he added. “That’s why I think that we’re going to do just fine.”