WASHINGTON – The Republican-controlled House has planted. the seeds of a debt-ceiling showdown, with Speaker Kevin McCarthy. Backing a push by his hard-liners to demand spending. Cuts as part of any extension of the nation’s borrowing authority.
Political divisions are deep and power is high.
Ultraconservative lawmakers insist they don’t want the country. To default, but their terms to raise the debt limit. Are unlikely to be accepted by the Democratic-led Senate or President Joe Biden.
Republicans are on a collision course with the White House. Which is demanding Congress raise the debt ceiling without conditions.
If they fail to resolve their differences and cause a default. The consequences range from a stock market crash. A recession, higher interest rates for consumers, a weaker dollar. A US credit downgrade and a government unable to meet all its obligations. Financing the military to provide social security benefits.
What is the debt ceiling?
This is a 1917 legal limit that caps the level of debt the federal government can assume. Once the United States exceeds the limit and exhausts the means to pay its bills. Congress must lift the ceiling to allow. The government to continue borrowing to meet its obligations. If not, the country could be forced to default, which experts warn would be disastrous.
Republicans have had heated battles over the debt ceiling. Especially in 2011, but they have always been resolved on time.
The issue is understood by the public and is often portrayed as a vote to spend more money. When it is about paying bills that are imposed by the United States. Congress is unique in that it votes to raise spending or cut taxes. Which adds to the debt, but forces the country to vote on whether it should borrow to pay those bills.
When is the debt ceiling deadline?
The US is expected to exceed the borrowing limit on Thursday. After that, the Treasury Department will use. “Extraordinary measures” to continue paying the bill. Which is expected to last until “early June” when Congress must act. Treasury Secretary Janet Yellen told McCarthy, R-Calif., in a letter Friday. .
The national debt is about $31.4 trillion.
Why does a GOP House complicate debt ceiling negotiations?
Conservative lawmakers say that as part of their. Negotiations to allow McCarthy the speakership. It has promised to include major spending cuts to balance. The federal budget in any debt limit increase. And to do that, they secured other rule changes. That would give a small group of members the power to remove McCarthy.
But Democrats, who control the Senate and the White House, are unlikely to accept the cuts. They also oppose making policy concessions to lift the debt ceiling. Especially after the 2011 showdown, during Barack Obama’s presidency. When a GOP House brought the U.S. within days of economic collapse and the first downgrade by Standard & Poor’s. the time
New House rules, adopted by Republicans last week. Must a clear vote to extend U.S. borrowing authority. Eliminating a deadline Congress before used to fast-track it.
What do Republicans want?
different things So far, there is no set of specific demands. And no document that reflects a consensus position within the party. Republicans have floated everything. From budget cuts to conservative legislation as part of raising the debt ceiling.
McCarthy said the debt ceiling is a test of the GOP’s commitment to holding the line on spending. Appearing on Fox News on Sunday. He compared the US government to an expensive child whose credit card limit needs to be lowered.
“You can’t raise it,” he said, urging Biden to discuss spending cuts. “For the good of America we sit down and change our behavior. Because what we’re going to do is bankrupt this country. And bankrupt these rights if we don’t change their behavior today.” (Social Security and Medicare are the most expensive of those programs.)
Rep. Ralph Norman, R-S.C. Said he wants to reduce. The dollar-for-dollar cost of any loan limit increase. “Also, we need to make some progress on the deficits we have.”
