Dear Commons Community,

Fox News host Neil Cavuto warned the U.S. is inching dangerously close to defaulting on its debts and pressed Gene Sperling,  a top economic adviser to President Biden on the issue.

“We obviously spend more money than we take in, a lot more money,” Cavuto said during an interview with Sperling on his afternoon news program last week.  “And something has to be done about this. I don’t know if this debt thing is the means or the way to do it. But it seems like Democrats are very resistant to talk about entitlements, maybe understandably. Republicans are very resistant to talk about curbing defense.”  

Cavuto added the country now has “a debt-to-GDP ratio of over 100. In other words, we owe more than we’re worth as a country,” asking Sperling “That’s not sustainable, right?”

“Well, listen, we inherited the largest debt increase. It was a — it was very large,” Sperling responded. “It wasn’t just due to the pandemic. It was also due to a $2 trillion tax cut in 2017, at a time where our economy did not need stimulus, $2 trillion in debt increase.”

The host interjected, saying “I think it’s fair to say the pandemic —  the pandemic was a huge part of that, Gene. I think you would have to admit that.”

“Absolutely. Absolutely,” the top White House adviser said. “Sixty-two percent of the pandemic funding that wasn’t paid — that affected our debt was done under President Trump. And, yes, much of that was absolutely needed.”

On Thursday Treasury Secretary Janet Yellen wrote in a letter to congressional leaders that the department would now resort to “extraordinary measures” to ensure the U.S. does not default on its debt payments, The Hill previously reported. The U.S.’s debt eclipsed $31.4 trillion this week.

Meanwhile, Senate Minority Leader Mitch McConnell (R-Ky.) also said Thursday he is confident that the U.S. will never default on its debt.

“In the end, I think the important thing to remember is that America must never default on its debt. It never has, and it never will,” the Republican leader said. “We’ll end up in some kind of negotiation with the administration over what the circumstances or conditions under which the debt ceiling be raised.” 

This will be “the” major political battle in late spring!

Tony

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