Former US President Donald Trump has said Republicans should allow the federal government to default on its $31-trillion debt if Democrats don’t agree to “massive” spending cuts, urging the GOP to take a harder line in negotiations to raise the debt ceiling.
Speaking at a town hall event hosted by CNN on Wednesday night, Trump was asked how lawmakers should address the looming debt crisis, as the two major parties struggle to reach a deal on the federal borrowing limit, which currently sits at $31.4 trillion.
“I say to the Republicans out there, congressmen, senators, if they don’t give you massive cuts, you’re gonna have to do a default,” Trump said, adding that he believes “the Democrats will absolutely cave” before they allow that to happen.
Trump went on to slam the government for “spending money like drunken sailors” and urged officials to slash budgets and reduce the debt, warning that “our country is being destroyed by stupid people.”
When host Kaitlan Collins pressed the ex-leader on his previous opposition to using the debt ceiling as a “negotiating wedge,” Trump simply replied: “That’s when I was president.” Asked why his position had changed, he said, “because now I’m not president,” drawing laughs from the CNN audience.
A default on America’s debt would mean the government is unable to meet its outstanding obligations, including welfare payouts, interest on the existing debt and even paychecks for military service members. According to the Congressional Budget Office, federal spending currently exceeds revenues by around $1.4 trillion, a deficit that will have to be covered by borrowing.
Time is running out for Congress and the White House, however, as Treasury Secretary Janet Yellen warned that the government may be unable to pay its bills as soon as next month should lawmakers fail to strike a deal to raise the debt limit.