Donald Trump Calls on Republicans to Demand $5 Trillion in Spending Cuts from Democrats
CNN hosted with President Donald Trump, where he said that the GOP should let the US default on its debts if Democrats don’t agree to cut the budget.
During CNN’s town hall with Republican frontrunner Donald Trump, the former president was asked his thoughts on the country’s debt “situation” and how to “move forward.”
To the surprise of many watching at home, Trump told Republican leaders on Capitol Hill that “if [the Democrats] don’t give you massive cuts, you are going to have to do a default.” Trump explained that the threat of defaulting represents such a grave threat to the economy that the Democrats will cave to the GOP’s demands. Trump relied on GOP talking points, arguing that the debt limit should not be raised because Democrats are spending like “drunken sailors.”
Donald Trump dismissed the $7 trillion federal budget as “nonsense.” While the figure he mentioned is not entirely accurate, as the Congressional Budget Office projects the government to spend $6.2 trillion this year, Trump’s comments reveal his limited understanding of fiscal policy. The former president went on to call for Republicans to aim for spending cuts of up to $5 trillion, which could have serious consequences for US citizens, highlighting his disregard for the potential impact of such drastic measures.
I think if the Republicans hold strong, and they say [...] we want $5 trillion off, I really think the Democrats have no choice but to do it.
Donald Trump doubles down
The effects of a US debt default would be catastrophic, not just for the US economy. When asked if this was really his position by the event’s moderator, Kaitlan Collins, Trump responded, “You might as well do it now because you will do it later because we have to save this country.” The “you” are Republican leaders who have tried to downplay the threat of a default, understanding that such a move would be extremely unpopular with voters nationwide.
Donald Trump flip-flops on exploiting the debt ceiling
What the former president neglected to mention is that during his four years in office, the national debt ballooned from $19.8 trillion to $27 trillion —a thirty-six percent increase. In part, the national debt grew so quickly under Trump because of the Tax Cuts and Jobs Act that slashed the corporate tax rate from thirty-five to twenty-one percent. While spending has increased under President Biden, there is a revenue component to the growth in national debt. With taxes cut for high-income earners and the largest companies in the country, the government has less money to spend on social programs, the military, and other critical government expenditures. To cover these costs, the government must borrow money, or Congress needs to raise taxes or identify other revanue streams.
Collins called attention to the hypocrisy of Trump’s current ideas on the debt ceiling, noting that when he was president, he said that “using the debt ceiling as a negotiating wedge could not happen.”
“Sure, that was when I was president,” responded Trump, admitting that since he was out of office, he would exploit the issue to help the GOP further their political agenda. The crowd laughed and applauded.
How will Donald Trump’s comments impact the negotiations?
Before Trump’s appearance on CNN, Speaker of the House Kevin McCarthy seemed confident that an agreement to avoid a default could be reached with the White House.
It remains to be seen how Trump’s remarks during the town hall will impact the bargaining position of Republican leaders. On the one hand, the Speaker and the GOP do not want to be blamed for such a widespread economic crisis. However, if they reject the advice of the former president, they could make themselves a target of his attacks. So far, no Republican leaders have made public comments about Trump’s call to default should Democrats refuse to enact cuts to spending.