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Saturday, Jul 11, 2026

Republicans are holding the American economy 'hostage' over the debt ceiling after rejecting Biden's offer of $3 trillion in deficit cut proposals, House Progressive Caucus says

Republicans are holding the American economy 'hostage' over the debt ceiling after rejecting Biden's offer of $3 trillion in deficit cut proposals, House Progressive Caucus says

Republicans have rejected Democratic proposals to lower the deficit. Democrats will blame them if the US defaults on the debt.
Republicans say Democrats are unwilling to negotiate spending cuts. House Democrats have flipped the switch.

The US could have only until June 1 to raise the debt ceiling to avoid a default that would rock the global economy, Republicans have refused to raise the debt limit unless they can cut spending. House Democrats are blaming their Republican colleagues for rejecting Democratic proposals to reduce the deficit.

"The Republicans rejected $3 trillion worth of policies that could have gone towards deficit reduction," Rep. Pramila Jayapal, chair of the House Progressive Caucus, said at a Wednesday press conference after speaking with President Biden Tuesday night.

On Tuesday, Rep. Matt Gaetz of the Freedom Caucus told Joseph Zeballos-Roig, a Semafor reporter, that he and his conservative colleagues "don't feel like we should negotiate with our hostage."

"Who exactly is that hostage?" Jayapal asked. "It's the American economy. It's seniors, parents, kids, veterans, people with disabilities, teachers, the poorest Americans."

"We will continue to reject and call out this reckless hostage-taking from extreme MAGA Republicans," she emphasized.

The proposals the GOP rejected included ending oil subsidies, closing tax loopholes, negotiating down more Medicare drug prices a billionaire minimum tax, a corporate global minimum tax, and "raising taxes on large corporations from the outrageous cut that Trump instituted — all together $3 trillion in savings," Jayapal said.

The GOP-controlled House narrowly passed a bill in late April that would raise the debt ceiling by $1.5 trillion, slash $4.5 trillion from the federal budget, increase work requirements on social welfare programs, ban student loan-forgiveness programs, and roll back earmarked pandemic spending.

President Joe Biden has vowed to veto the bill, and McCarthy has refused any short-term debt-limit increase to give negotiations more time. Despite so-called "productive" meetings, the two have failed to negotiate deficit reductions that would satisfy Republicans.

If they can't come to an agreement about how to lower the deficit and get Republicans to raise the debt ceiling, 2.6 million Americans could lose their jobs. Americans could each lose $20,000 in retirement savings and see their mortgage, small business, and private student-loan payments surge.

"Republicans want you to believe that there are only two choices: their extreme bill that would make you pay for tax cuts for the wealthiest, or default that pushes our economy into catastrophe," Jayapal added.

"Don't buy it. There are other options," she insisted, from Republicans joining Democrats in a discharge petition to force a vote to raise the debt ceiling, Biden invoking the 14th Amendment to override the debt ceiling, to Republicans agreeing to "any—any—revenue-raising policies so that it's the wealthiest and big corporations reducing the deficit by paying their fair share."

With Republicans rejecting Democratic proposals, Jayapal said, "If we default and if we crash the economy, there is only one person to blame and that is the Speaker of the House Kevin McCarthy."
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