As the standoff between the White House and the new Republican House majority over the debt ceiling continues, Senate Minority Leader Mitch McConnell, R-Ky., expressed confidence that the United States will avert a first-ever default on its obligations.

What You Need To Know

  • In an interview with Spectrum News on Tuesday, Senate Minority Leader Mitch McConnell, R-Ky., expressed confidence that the United States will avert a first-ever default on its obligations

  • The country reached the $31.4 trillion debt limit in January; Treasury Secretary Janet Yellen said that her department has employed "extraordinary measures" in order to allow the country to continue paying its bills

  • McConnell reiterated his position that any agreement on raising the country's borrowing power will have to be reached between House Speaker Kevin McCarthy and President Joe Biden

  • In testimony to the Senate Banking Committee on Tuesday, Mark Zandi, Chief Economist of Moody’s Analytics, warned that a default would be "catastrophic" for the economy – with even a brief default potentially resulting in a million jobs lost and a "mild" recession

"Everybody knows from the beginning you're not going to default," McConnell said in an interview with Spectrum News on Tuesday. "It's simply unacceptable, it's not going to happen. [House Speaker Kevin McCarthy] said that as well.

The country reached the $31.4 trillion debt limit in January. Treasury Secretary Janet Yellen said that her department has employed "extraordinary measures" in order to allow the country to continue paying its bills. Experts appear split on how long those measures will last. The Bipartisan Policy Center predicted the U.S. could face default as soon as early June, while the nonpartisan Congressional Budget Office estimates those measures will expire at some point between July and September.

President Joe Biden has insisted that lawmakers lift the debt ceiling without conditions, but House Speaker Kevin McCarthy, R-Calif., and his newly empowered GOP House majority are calling for spending cuts in order to increase the country's borrowing power.

One point of contention between both parties for possible cuts has been the key entitlement programs Social Security and Medicare, a political lightning rod in recent weeks.

Biden is expected to unveil his upcoming budget plan for the next fiscal year this week, which is set to include a plan to protect Medicare for at least the next 25 years. Speaker McCarthy has said such cuts are “off the table” in talks to raise the debt limit, although some GOP lawmakers — including former Vice President Mike Pence, Sen. Ron Johnson of Wisconsin and the Republican Study Committee — have called for entitlement reform that could result in cuts.

Speaking to Spectrum News on Tuesday, Leader McConnell reiterated his position that any agreement on raising the country's borrowing power will have to be reached between Speaker McCarthy and President Biden.

"The reason it starts with McCarthy is because he's in the majority and I'm not," McConnell said. "I think he and Biden have to reach an agreement about what are the conditions, if any, that will be attached to raising the debt ceiling."

"I don't think a bill passed the Senate first would necessarily pass the House, so that's where it has to start," he added. 

McConnell is no stranger to working with Biden on such issues in the past, including collaborating with the then-vice president to pass the Budget Control Act to end 2011's debt limit crisis.

When asked if he has spoken with Biden this time around, the Kentucky Republican replied, "not about that issue."

In testimony to the Senate Banking Committee on Tuesday, Mark Zandi, Chief Economist of Moody’s Analytics, warned that a default would be "catastrophic" for the economy – with even a brief default potentially resulting in a million jobs lost and a "mild" recession. 

"A default would be a catastrophic blow to the already fragile economy," Zandi said in his prepared remarks to the panel. "Global financial markets and the economy would be upended, and even if resolved quickly, Americans would likely pay for this default for generations, as global investors would rightly believe that the federal government’s finances have been politicized and that a time may come when they would not be paid what they are owed when owed it."

"I think it's important to reassure the economy in the country that we're not going to default," the Kentucky Republican said. "But we will have a discussion and hopefully, the speaker and the president can agree to something that makes sense."