Ted Cruz Says ‘Under No Circumstances’ Should US Default on Debt

(Bloomberg) — Senator Ted Cruz said that “under no circumstances should the United States default on our debt,” as the House prepares to vote on a plan that would raise the debt ceiling but slash federal spending, which the White House opposes.

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Cruz appeared to back House Speaker Kevin McCarthy’s gambit, saying on Bloomberg Television’s “Balance of Power,” that congressional Republicans “should use the debt ceiling as leverage to force real and meaningful reform.”

Cruz, a Texas Republican, spoke from the Capitol as McCarthy prepared for a vote on his bill linking a debt increase to spending cuts.

The senator accused President Joe Biden of wanting to “scaremonger and threaten a default,”

Treasury Secretary Janet Yellen is expected to provide Congress new guidance, possibly by the end of this week, on how much time lawmakers have to lift the ceiling before default becomes a real danger.

McCarthy’s proposal would increase the nation’s debt ceiling by $1.5 trillion, in order to stave off a US payments default until March 31, 2024, at the latest. In exchange, it calls for trimming $4.8 trillion in deficits over a decade in part by cutting discretionary spending by $130 billion next year and capping its growth at 1%. The measure would also ease energy permits.

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