White House warns of cuts to state and local government funding without raising debt ceiling

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The White House is warning state and local governments that the consequences for them will be dire if Congress does not raise the debt ceiling and the United States defaults.

In a note, the White House said that while the United States could no longer pay its obligations and defaults, “billions of dollars in state aid and state-funded but government-funded programs. federal government could be halted “.

The note comes as Republicans insist they will not vote to raise the debt ceiling, while the White House urges Congress to pass a bipartisan vote to do so. The Treasury Department estimates that the borrowing authority will expire in October, after which the United States will no longer be able to pay its bills.

Programs that will be affected include disaster relief efforts through the Federal Emergency Management Agency and other departments, Medicaid and Children’s Health Insurance Program, infrastructure funding and the program. National School Lunch, among others.

“Reaching the debt ceiling could trigger a recession,” the memo reads. “Economic growth would weaken, unemployment would rise and the labor market could lose millions of jobs.”

The White House also said a debt limit crisis could make it more difficult for state and local governments to borrow money.

Republicans say the United States needs to curb spending, and it’s Democratic spending, not debt limits, that is the real problem.

“Let me be clear on this. Republicans are united against raising the debt ceiling,” Senate Majority Leader Mitch McConnell said Tuesday.

The White House noted that Congress has raised the debt ceiling several times, including three times under former President Trump.

The fight against the debt ceiling comes as the Biden administration and most Democrats on Capitol Hill want to adopt a $ 3.5 trillion plan to improve the country’s social safety net. But that price is too high for Democratic Senators Joe Manchin and Kyrsten Sinema, and the proposal would also need the support of the 50 Democratic Senators.

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