Schumer: Tax cut may derail debt-ceiling increase

Senate Minority Leader Charles Schumer (D-N.Y.) on Tuesday warned that Democrats may block an effort to raise the federal debt ceiling if Republicans move to slash taxes.

President Trump has vowed to pass the biggest tax cut in history, and Republican negotiators have been laying the groundwork for a tax reform package for weeks.

But that may make it tougher for GOP leaders to count on Democratic votes to help raise the debt ceiling next month.

{mosads}“If they’re going to put on a massive tax cut for the very wealthy that increases the deficit by trillions, it’s harder to get Democrats to increase the debt ceiling,” Schumer told reporters.

Congress last raised the debt ceiling in October of 2015, after then-President Barack Obama and Democrats took a tough line by refusing to negotiate on the measure.

Lawmakers raised the debt ceiling as part of a deal to increase spending caps on military and domestic programs and curb the growth of Social Security disability benefits.

Republicans at the time claimed that the $168 billion in Social Security savings was an important concession won in exchange for raising the debt ceiling, while Democrats claimed it was part of the deal on domestic spending.

Schumer did not rule out negotiating spending reforms connected to the debt-ceiling increase on Tuesday, but emphasized that Republicans would bear the political consequences if a failure to expand federal borrowing authority upsets the financial markets.

“The onus is on the Republicans. They have the presidency, the House and the Senate. The onus is on them to deal with the debt ceiling,” Schumer said.

Treasury Secretary Steven Mnuchin, who is taking the lead for the Trump administration on raising the debt ceiling, has told lawmakers that Congress needs to act before leaving town for the August recess.