Cruz pins debt crisis on Democrats’ ‘trillions’ but Trump spilled 11x more red ink than Biden so far

WASHINGTON — Sen. Ted Cruz has threatened to filibuster any Democratic attempt to raise the debt limit, a tactic intended to force Democrats to do it themselves without GOP support because, he said, they spent the money and should therefore own the fallout.

“What [Majority Leader Chuck] Schumer is desperately trying to get is political cover of 10 Republicans voting for the trillions of dollars of debt that the Democrats have irresponsibly racked up, and the trillions more that they want to rack up,” Cruz told reporters Tuesday at the Senate.

He’s right that Democrats desperately want to avoid taking full ownership of the next few trillion in debt.

But contrary to Cruz’s effort to blame past Democratic extravagance, the glop of icing atop the humongous mountain of federal debt was added under the last president.

The debt ballooned by $7.8 trillion under Republican Donald Trump. That spending — for a $2.1 trillion bailout when the pandemic sent the country into lockdown, and for tax cuts that he, Cruz and other Republicans insisted would not drive up deficits — accounts for most of the current problem.

Since President Joe Biden took office in January, the national debt has risen just $677 billion — well shy of even a single trillion.

Future spending will require a future debt limit increase but for now, the Treasury Department needs Congress to raise the federal line of credit so it can pay debts already incurred.

Treasury Secretary Janet Yellen has pleaded with Congress to set aside partisan considerations. She warned Tuesday of “catastrophic” consequences, including lapsed Social Security payments to 50 million recipients, if the government is unable to meet all of its financial obligations.

“I fully expect it would cause a recession,” she said on CNBC.

The government is projected to exhaust its current credit limit on Oct. 18.

The shortfall could reach $265 billion. Treasury may be unable to pay 40% of its obligations.

When the Treasury missed just $122 million in payments in 1979 during a congressional debt showdown, short-term interest rates immediately spiked and the U.S. government debt rating was downgraded for the first time.

A Sept. 24 analysis from the Bipartisan Policy Center warned that allowing the government to hit the debt limit “would be an unprecedented economic event with domestic and global implications,” noting that even the threat of default has shaken global markets.

Even a short-term default could cause higher borrowing costs and unemployment, walloping the stock market and economic output.

“We’re going to make sure that these costs that have already been incurred are going to be covered. Because even if you didn’t spend another penny in 2021, you’d have bills to pay. … This just has to be done,” said Sen. Ron Wyden, D-Ore.

In August 2019, Congress suspended the debt limit through the end of July 2021. The limit then reset at around $28.4 trillion, which left relatively little room for deficit spending before the next fiscal cliff.

Nearly 60% of that debt — $16 trillion — piled up while one Republican or another occupied the White House in the last five decades.

"At the end of the day Chuck Schumer is going to surrender ... There's not going to be a default. @SenSchumer knows that, @JoeBiden knows that, @SpeakerPelosi knows that. But they want to play political games first," says @SenTedCruz on the debt ceiling. pic.twitter.com/Od0g4oZJqn — Squawk Box (@SquawkCNBC) October 5, 2021

Cruz downplayed the risk of default, insisting that Democrats will eventually relent and raise the debt ceiling on their own, averting the disaster.

“There’s not going to be a default,” he told CNBC. “At the end of the day, Chuck Schumer is going to surrender and he’s going to do what we told him three months ago he needed to do, which was to take up reconciliation.”

Reconciliation is a complicated and time-consuming procedure that Democrats could pursue but don’t want to.

They’d have to reopen a budget bill approved two months ago and specify a new limit for the national debt. They have the votes to do that.

As Cruz indicated, though, that’s a political capitulation; if only Democrats vote to incur the next few trillion in debt, that’s an easy line of attack in the midterm elections.

Senate Republicans are determined to leave Democrats with no alternative, and the 50-50 split in the Senate gives them optimal leverage.

Even a single GOP objection would derail Democrats’ attempt, expected Wednesday, to raise the debt limit through the end of 2022.

Democrats would need 10 Republicans to overcome that filibuster, but Minority Leader Mitch McConnell has held Republicans together in this showdown. Cruz has been especially outspoken in defending the tactic of trying to shift the onus onto Democrats to cover debts incurred when they weren’t in charge.

“They have 100% control and ability to raise the debt ceiling on reconciliation. And the only reason they wouldn’t do so is to play political games,” Cruz insisted three weeks ago in an interview with Politico.

Democrats wish they had 100% control but Senate rules require 60 out of 100 votes for most anything. The chamber is divided 50-50, with Vice President Kamala Harris holding the tie-breaking vote.

On Tuesday, some Democratic senators were floating the possibility of carving out an exception for debt ceiling votes. That would invite all sorts of retaliation whenever Republicans regain control. And a rules change would require complete unity the Democrats likely don’t have for such a maneuver.

“Mitch McConnell is threatening to blow up the economy by standing in the way over an ordinary process of holding a vote,” fumed Sen. Jeff Merkley, D-Ore. “That’s an unacceptably dangerous thing to do. … Right now we have a tyranny of the minority.”