Democratic Rep. Ro Khanna of California said Tuesday that House Republicans are threatening to "hijack the entire U.S. economy" and "subject it to collapse" in pursuit of cuts to Social Security and other right-wing policy goals, a warning that came as the Treasury Department prepared to take emergency measures to prevent the U.S. from breaching the debt ceiling.
"This is what the Freedom Caucus wants," Khanna said in an appearance on Democracy Now!, referring to the far-right faction of House Republicans pushing to use the debt ceiling as leverage to enact deep cuts to federal spending—a strategy that Speaker Kevin McCarthy (R-Calif.) has embraced.
"The consequence of that is also a massive default of the U.S. economy and higher interest rates, probably a severe recession, and jolting the global economy," added Khanna, who stressed his support for expanding rather than cutting Social Security. "But they don't care. They don't care about breaking the institutions, breaking the economy."
Khanna's remarks came days after Treasury Secretary Janet Yellen announced her agency will begin taking certain "extraordinary measures" this week to prevent the U.S. from breaking through the debt ceiling, an arbitrary—and arguably unconstitutional—borrowing limit set by Congress that dictates how much the federal government can borrow to meet its obligations, which include Social Security and Medicare benefits.
If lawmakers fail to raise the borrowing limit due to GOP obstruction and the Biden administration refuses to take unilateral action, the U.S. could default on its debt, an unprecedented outcome that would carry far-reaching and devastating economic consequences such as the potential loss of millions of jobs.
The Washington Postreported Friday that House Republicans—who have repeatedly pledged to exploit a coming debt ceiling fight to secure Social Security cuts—are already "preparing a plan telling the Treasury Department what to do if Congress and the White House don't agree to lift the nation's debt limit later this year."
"The plan, which was previously unreported, was part of the private deal reached this month to resolve the standoff between House conservatives and Rep. Kevin McCarthy (R-Calif.) over the election of a House speaker," the newspaper continued. "Rep. Chip Roy (R-Texas), a leading conservative who helped broker the deal, told The Washington Post that McCarthy agreed to pass a payment prioritization plan by the end of the first quarter of the year."
"The emerging contingency plan shows how Republicans are preparing to threaten to not lift the nation’s debt ceiling without major spending cuts from the Biden administration," the Post added. "Congress must pass a law raising the current limit of $31.4 trillion or the Treasury Department can't borrow anymore, even to pay for spending lawmakers have already authorized."
In a blog post on Tuesday, former U.S. Labor Secretary Robert Reich argued that the GOP agreement outlined by the Post "could be the most economically irresponsible backroom deal in Republican history (even conservative economists are warning that the consequences could include a stock-market spiral and significant job losses)."
"Congress could defuse this bomb by simply raising the debt limit, as it has dozens of times under presidents of both parties for decades," Reich wrote. "But the MAGA radicals now in control of the House of Representatives are refusing to raise the debt ceiling unless President Biden agrees to devastating cuts to Social Security, Medicare, and other key programs."
President Joe Biden has said he would not accept any cuts to Social Security or Medicare, a promise the White House reiterated on Friday.
"There's going to be no negotiation over it," Jean-Pierre added. "This is something that must get done."
Biden previously indicated that he—unlike Yellen—would not support a complete elimination of the debt ceiling, raising questions about what executive steps the White House would be willing to take in the case of a perilous impasse in Congress.
The American Prospect's Robert Kuttner wrote in a column Tuesday that it is time for the White House to "call a halt to this whole game."
"As a number of legal scholars, led by Garrett Epps, have pointed out, the 14th Amendment explicitly dispenses with the need for a separate vote on increasing the debt. Section 4 provides that 'the validity of the public debt of the United States... shall not be questioned,'" Kuttner noted. "Biden could announce that he is not going to play the Republicans' game and relitigate spending that has already been approved by Congress. The Republicans would contend that this breaching of the legislated debt ceiling is illegal, and appeal it to the high court."
"By refusing to play," Kuttner added. "Biden would signal that if Kevin McCarthy wants to tank the world economy by allowing the U.S. to default on Treasury bonds, that's on him."
While acknowledging that such a "hardball" strategy would come with risks, Kuttner argued that "allowing McCarthy to call the tune, forcing disabling budget cuts and humiliating Biden's presidency, has even greater risks."