Bond Analysts Discuss Circumstances Around A Debt Ceiling Crisis
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At his rally in Phoenix last night, President Trump threatened to shut down the government if Congress doesn't fund his border wall with Mexico. His threat comes at a time when Congress faces some difficult budget challenges. Here's NPR's Jim Zarroli.
JIM ZARROLI, BYLINE: President Trump wants more than a billion and a half dollars to begin construction of his border wall, but Democrats in the Senate have made clear they won't go along with the idea. Last night, Trump suggested he might reject any spending plan that doesn't include the funding.
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PRESIDENT DONALD TRUMP: Now, the obstructionist Democrats would like us not to do it. But believe me, if we have to close down our government, we're building that wall.
ZARROLI: Whether Trump will really carry through on his threat isn't clear, but the president's rhetoric makes an already complicated budget picture even worse. Congress is facing two big deadlines. First, it has to raise the debt ceiling to allow the government to keep borrowing. If it doesn't do so by early October, the government won't be able to pay all of its bills. Charles Seville, senior director of Fitch Ratings, says he thinks Congress is unlikely to go to the brink.
CHARLES SEVILLE: Clearly, you know, we've had dozens of occasions the debt limit has been raised in the past. And, you know, we don't expect this time to be any different.
ZARROLI: And that view is echoed by Senate Majority Leader Mitch McConnell, who says there is zero chance Congress won't raise the debt ceiling. But lawmakers also have to come up with a spending plan by the end of September, and Trump's vow to go to the mat to get his border wall funded raises big new questions about whether that can happen. Seville says a big budget standoff now can only raise long-term questions about the ability of the U.S. to get its house in order.
SEVILLE: One thing that we have in the back of our minds is how the U.S. deals with its fiscal challenges and whether the sort of policy-making process works.
ZARROLI: And he says that could hurt the long-term standing of the United States in the bond markets. Congressional leaders are trying hard to dismiss such a scenario, but Trump can still make the budget process a lot more difficult if he chooses to. Jim Zarroli, NPR News.
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