Rep. Don Bacon (R-Neb.) said the possibility of the U.S. defaulting on its national debt is a “real threat” as lawmakers grapple with a fast-approaching breach of the debt limit.
“I think it is a real threat that both sides have to take serious,” Bacon said on ABC’s “This Week” in an interview with Jonathan Karl.
The threat of a possible default comes after Treasury Secretary Janet Yellen said last week that the U.S. is projected to hit its borrowing limit — roughly $31.4 trillion — by Jan. 19. Yellen’s pledge to take “extraordinary measures” to fend off a default sets the table for a showdown between the White House, Democrats in the Senate and a Republican-controlled House.
While Democrats want to quickly pass debt limit legislation, House Republicans are adamant that they will not cooperate without major spending cuts.
“The Republicans were largely elected to get control of reckless spending,” Bacon said. “On our side we have to realize … we can’t get everything we want either. I want our side to negotiate with the Democrats in good faith.”
But at the risk of getting nowhere in negotiations with Democrats, House Republicans have been putting together a plan on what the Treasury should do if the U.S. does come up against its debt limit, according to The Washington Post.
The plan would be to call on the Biden administration and the Treasury to only make the most critical federal payments, like making interest payments on the debt.
But Democrats have put pressure on Republicans to negotiate quickly to avoid a “disastrous” default on the national debt.
