Dems reject matched spending cuts, setting up showdown with House Republicans over debt ceiling

It's that time again: Congress has less than one week to hammer out an agreement to raise the debt limit before the U.S. Treasury Department must take "extraordinary measures."

The U.S. government is expected to reach the $31.4 trillion debt ceiling by Jan. 19. The national debt is currently $31.3 trillion. The debt ceiling was last increased in December 2021.

Members of the conservative House Freedom Caucus have said that spending cuts should match the amount of any debt limit increase.

Democrats are advocating a clean debt limit increase before the deadline, setting up a showdown between the parties.

"Congress must act on legislation to prevent a disastrous default, meet our obligations and protect the full faith and credit of the United States," Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries said in a statement on Friday. "A default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America's working families on everything from mortgages and car loans to credit card interest rates.

"Addressing the debt limit is about meeting obligations the government has already made, ensuring vital payments to Social Security recipients are uninterrupted and continuing to support our veterans. The debt limit was increased in a bipartisan way three times when Donald Trump was president, twice when Republicans had majorities in the House and Senate. This time should be no different."

Schumer and Jeffries want to "move quickly to pass legislation addressing the debt limit so there is no chance of risking a catastrophic default," they said.

"We've seen in previous debt ceiling stand-offs that even the threat of default leads to even higher costs for working families. Republican leaders must do the right thing to protect Social Security, the economy, and our country," the Democratic leaders said.

House Speaker Kevin McCarthy said he's ready to meet with President Biden to hash out an agreement.

"I had a very good conversation with the president when he called me, and I told him I'd like to sit down with him early and work through these challenges," McCarthy said on Thursday.