How China Became a Wedge Issue Amid the US Debt Ceiling Nail-Biter

Against the backdrop of a looming debt default, the U.S. House in late April passed the Limit, Save, Grow Act of 2023, a Republican-led bill proposing to raise the country’s borrowing limit. The partisan debate over China’s role in the debt limit issue centers around three key points: prioritization of payment, government spending cuts, and energy supply chains. The Biden administration’s Treasury Secretary Janet Yellen warned that the Republican proposal would prioritize China over other entities to be among the first to receive payments, calling it a “dangerous idea” that amounts to “default by another name.” Other prominent Democrats, including Representatives Richie Neal and Don Beyer, criticized the bill as a “Pay China First” strategy that places China ahead of the U.S. military and economy. The debt limit bill has also become a battleground for energy supply chains, with Republicans emphasizing the need to enhance critical U.S. energy resources in the face of Biden’s “rush to green” policy. Senate Majority Leader Chuck Schumer defended the economic benefits brought by the Inflation Reduction Act, contending that GOP’s Limit, Save, Grow Act of 2023 would “send American jobs and critical battery manufacturing to China.” Representative Paul Tonko decried the Republicans’ lack of action to counter China’s lead in clean energy industries, contrasting it with the Democrats’ Infrastructure Investment and Jobs Act and Inflation Reduction Act, the provisions of which are nearly the antithesis of the GOP’s bill.