Treasury Secretary Janet Yellen recently announced that, within the next month, the federal government will exhaust so-called “extraordinary measures” that are being used to fund our debt obligations. Put simply, this means a fight to raise the debt ceiling will be at the top of the agenda when the House reconvenes next week.
I will not vote to raise the debt ceiling while Democrats are failing to govern responsibly. It has become crystal clear over the past several months that President Biden and the Democrats’ reckless spending policies have sent this country down two dangerous paths — skyrocketing national debt and rising inflation — setting up a fiscally problematic situation that leads up to the debt limit.
During debate on the Democrats’ $1.9 trillion “COVID relief” bill back in February, my Republican colleagues and I repeatedly warned that Democrats’ reckless spending would have a devastating inflationary effect. In fact, many experts at the time, including former President Obama’s top economist, warned spending trillions would devalue the dollar and cause the price of goods and services to increase. Just one month later, we learned that the Consumer Price Index (CPI) had its highest monthly jump in 10 years. Over the past several months, inflation has continued to surge at a pace not seen since right before the Great Recession.
History tells us what comes next: interest rate hikes. Similar events unfolded in the 1970s, when easy monetary policy — used to finance large federal budget deficits — led to skyrocketing inflation. By 1980, inflation had reached more than 14%. The Federal Reserve raised interest rates to over 20% to combat what became known as The Great Inflation. For some perspective, right now interest rates are near zero.
When interest rates increase, so do the payments we have to make on our nearly $28 trillion national debt. And this is where the two paths — debt and inflation — collide to form a dangerous, irreversible debt spiral.
That is why the impending debt limit should alarm every American, and it should jolt my Democratic colleagues back into reality — a reality where socialist-style spending has irreversible consequences for our economy and for future generations.
In the Iowa Senate, this is why I helped write and pass a 99% spending limit — ensuring Iowa does not spend more than we collect in revenue. But instead of working to rein in out-of-control spending by implementing other commonsense measures like discretionary spending limits, spending-to-GDP targets, and federal deficit targets, Democrats are working to fast-track $3.5 trillion in additional spending through Congress. Now, they want Republicans to help them raise the debt ceiling so they can keep the never-ending debt spiral spinning.
We cannot turn a blind eye to the reckless fiscal policies being carried out by this administration and Democrats in Congress. The future of our country is in jeopardy because of their progressive spending, creating debt that could destroy our currency and our economy.
By implementing massive tax and spending legislation, Americans should be concerned that Democrats are putting us on a fiscally perilous path — and once we go down this path, there is no turning back.