Fmr. Obama Econ. Adviser: Sooner We Get Debt Limit Deal with Spending Caps, the Better, Debt Limit Was Tied to Increased Spending in ’19

On Tuesday’s broadcast of CNBC’s “Squawk Box,” Professor of the Practice of Economic Policy at Harvard University and the Harvard Kennedy School Jason Furman, who served as Chairman of the Council of Economic Advisers under President Barack Obama and on the Council of Economic Advisers and the National Economic Council under President Bill Clinton, stated that while he would have preferred a clean debt limit increase, he thinks there will be a deal “that involves discretionary caps, permitting, and the debt limit,” and that the sooner an agreement is reached, the better. Furman also noted that there have been spending deals tied to the debt limit before, like the one in 2019 that raised spending.

Furman said that Treasury bill activity is “not telling us anything about the economy. They’re telling us something about the debt limit brinksmanship. And even just the brinksmanship itself has a cost. It’s completely unnecessary. I would have loved to have seen the debt limit abolished, seen a clean increase. But the faster they can get to some sort of agreement that involves discretionary caps, permitting, and the debt limit, clearly, that’s where this is going to end up, the sooner the better.”

He added that while he would eliminate the debt ceiling altogether, he noted that, “in 2019, we got a deal that had higher spending levels in exchange for raising the debt limit.”

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