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President-elect Donald J. Trump was forced to negotiate with Democrats over the borrowing cap during his first term.
Alan Rappeport covers the Treasury Department and has reported on debt limit fights during the Trump and Biden administrations.
- Dec. 19, 2024Updated 11:51 a.m. ET
President-elect Donald J. Trump injected debt limit politics into already-fraught congressional spending talks this week, urging lawmakers to lift the debt limit or abolish it entirely before he takes office next month.
The re-emergence of the debt limit comes 18 months after Republicans and Democrats staved off a fiscal crisis and agreed to suspend a cap on how much the government can borrow until after the 2024 presidential election. That was supposed to clear the decks and sidestep a politically difficult vote during the heat of campaign season.
But now the problem is waiting for Mr. Trump. As he prepares to push an agenda of tax cuts and border security, Mr. Trump fears that a debt limit fight next year could interfere. His plans are expected to cost trillions of dollars, much of which will most likely need to come from borrowed funds. A drawn-out debt limit fight next year could force Mr. Trump and Republicans to bow to the demands of Democrats and could consume the congressional calendar.
“This is a nasty TRAP set in place by the Radical Left Democrats!” Mr. Trump wrote on social media on Wednesday night.
Republicans are always reluctant to lift the debt limit, particularly when a Democrat is in the White House, saying it enables runaway spending. G.O.P. lawmakers regularly use it as a tool to extract concessions, such as spending cuts, from Democrats when they are in power.
But Republicans will soon control Congress, as well as the White House, putting the onus squarely on them to either deal with the debt limit or face the prospect of a default. The standoff over the debt limit last year roiled markets and led to a downgrade of the long-term credit rating of the United States. Mr. Trump would like to avoid a similar scenario on his watch.
