U.S. Rep. Teresa Leger Fernandez is urging Republican colleagues to raise the nation's debt ceiling without demanding steep federal spending cuts, saying failure to do so will have grave consequences for the global economy.
“If they don't do that, we could fall into economic recession that is bigger than anything we've ever seen," Leger Fernandez, a Democrat representing the 3rd Congressional District, told the Roswell Daily Record during a visit to Roswell Thursday.
Leger Fernandez's remarks came the same day the U.S. Treasury Department announced the outstanding debt of the nation reached its statutory limit of $31.4 trillion. In the short term, extraordinary measures are being taken to ensure the U.S. pays its bills, but Congress will need to raise the nation's borrowing cap to avoid a debt default.
Since taking control of the U.S. House of Representatives following last November's elections, some Republicans have sought to use the need to lift the cap on the nation's debt to exact significant federal spending reductions as a means of tackling the mounting federal deficit.
But Leger Fernandez and other Democrats note that raising the debt ceiling doesn't allow new spending, but is the vehicle used to pay bondholders and other creditors for debt that has already accrued.
“We've already appropriated this money, we've already authorized this money, it is simply about paying our bills,” she said.
In 2011, House Republicans tried to use the need for a debt ceiling increase to exact federal spending cuts from then-president Barack Obama and Congressional Democrats.
Eventually, legislation was passed to extend the borrowing limit, but according to a U.S. Government Accountability Office report, initial uncertainty around whether Congress would do so caused borrowing costs to jump by $1.3 billion and led to a downgrade in the U.S. credit rating.
According to a recent study by Moody's analytics late last year, failure to increase the debt ceiling could cause the loss of five million jobs.
The U.S. Treasury Department states that since 1960, Congress on 78 occasions has voted to “permanently raise, temporarily extend, or revise the definition of the debt limit.” Of those times, 49 were under Republican presidents and 29 under Democratic presidents.
Leger Fernandez accuses Republicans of a double standard, noting that under Republican President Donald Trump, they worked with Democrats to lift the debt limit several times, without demanding spending restrictions.
“You should not say I am going to vote for a debt ceiling increase when its a Republican president, but as soon as it's a Democrat (say) I am going to say no,” she said.