McConnell's threats are pushing the US 'toward a massive fiscal cliff' — as Trump cheers on the brinksmanship

McConnell's threats are pushing the US 'toward a massive fiscal cliff' — as Trump cheers on the brinksmanship
Mitch McConnell/Shutterstock

Republicans and Democrats in the federal government still haven't reached an agreement on the United States' debt ceiling. But Senate Minority Leader Mitch McConnell, according to Washington Post sources, recently met with Treasury Secretary Janet Yellen and two former Treasury secretaries — Steve Mnuchin and Henry Paulson — to discuss the matter.

Meanwhile, former President Donald Trump is encouraging Republicans to use the debt ceiling as a "powerful tool" against Democrats.

The Post's Jeff Stein reports this week that according to "four people aware of the conversations," McConnell's discussion with Yellen, Mnuchin and Paulson "did not resolve the matter" — which means that "the United States is now racing toward a massive fiscal cliff with no clear resolution at hand." Mnuchin served under Trump, while Paulson served under President George W. Bush.

Stein explains, "Paulson and Mnuchin have, in recent weeks, spoken with both McConnell and Yellen as the Biden administration tries to ensure the country does not default on its debt obligations and spark a global financial crisis. The backchanneling by Mnuchin and Paulson — who had previously worked together at Goldman Sachs — reflects the widespread alarm among economists and U.S. business interests about the consequences of an unprecedented default on the federal debt…. Yellen has recently warned that the debt ceiling must be raised or suspended by some time in October, or the country's fiscal situation will be severe."

Paulson, Stein notes, has "told the Biden Administration that McConnell is serious that Democrats must approve the debt ceiling hike on their own through the budget reconciliation process" — although "Democrats have said the debt ceiling must be approved on a bipartisan basis."

Trump, meanwhile, is urging Republicans in Congress to weaponize debt ceiling talks as much as possible.

In an official statement, the former president said, "The only powerful tool that Republicans have to negotiate with is the Debt Ceiling, and they would be both foolish and unpatriotic not to use it now…. The way I look at it, what the Democrats are proposing, on so many different levels, will destroy our Country. Therefore, Republicans have no choice but to do what they have to do, and the Democrats will have no choice but to concede all of the horror they are trying to inflict upon the future of the United States."

Although Trump's Twitter account has been suspended indefinitely, his statement was tweeted via ally Liz Harrington.

The Hill's Tal Axelrod notes, "The statement from Trump…. is the latest instance of Trump exerting his influence on Republicans in Washington while out of office…. The high stakes back-and-forth has increased the chances of a government shutdown and a default on the nation's debts, both of which could trigger significant economic downturns."

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