Donald Trump's secretary of treasury Steven Mnuchin reportedly held private meetings with Sen. Minority Mitch McConnell, R-Ky., to resolve the current debt impasse – but his efforts failed, with McConnell reportedly concerned that too high of a debt limit would threaten the nation's economic integrity.
The development, first reported by The Washington Post, comes on the heels of a now months-long standoff between Democrats and Republicans over the alleged potential for Biden's infrastructure deal to cause dangerous levels of inflation. According to a Tuesday analysis by Moody's Analytics, a federal default could spell a loss of six million jobs within the U.S. economy and is predicted to double the unemployment rate to 9%. During the Trump administration, the national debt climbed by about $8 trillion, according to the Post.
According to the Post, Mnuchin shared McConnell's concerns about raising the debt ceiling in private meetings with the senator. The former treasury secretary also reportedly discussed with McConnell the "mechanics of how the debt limit would be lifted, as well as the difficult negotiations with Democrats over the debt ceiling under Trump in 2018." However, his efforts to talk McConnell down from his cliff were apparently to no avail. Punchbowl News reported that Democrats reportedly sent McConnell other "intermediaries" prior, but none made any progress.
On Monday, Democrats in both the House and Senate leadership announced a proposal to raise the debt cap through December 2022. If Democrats failed to garner the support of 10 Republicans for the bill – a near certainty – then they will have the ability to pass it through budget reconciliation, which necessitates a simple majority vote.
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This week, Treasury Janet Yellen demurred the GOP's fiscal conservative, writing in a Wall Street Journal op-ed that the Congress must raise or suspend the debt limit.
"The U.S. has always paid its bills on time," Yellen argued. "But the overwhelming consensus among economists and Treasury officials of both parties is that failing to raise the debt limit would produce widespread economic catastrophe."
Although Democrats largely balked at GOP concerns about raising the debt ceiling, they have largely been insistent on conducting the move in a bipartisan fashion.
"The debt limit is a shared responsibility, and I urge Congress to come together, in that spirit, on a bipartisan basis as it has in the past to protect the full faith and credit of the United States," House Speaker Pelosi, D-Calif., wrote in a Sunday letter.
"We took on this debt in a bipartisan way. We're prepared to expand the debt in a bipartisan way," Larry Summers, President Obama's economic advisor, told the Post. "I don't see why it's justified to refuse to acknowledge reality," Summers said in an interview. "Reality is not a partisan thing. Raising the debt limit is acknowledging reality, not making a partisan choice."
On Tuesday, the House approved a measure that would prevent a government shutdown and suspend the debt limit if a compromise is not reached in time, though the bill could still be impeded in the Senate.