"Federal Government Bouncing a HUGE Check (Defaulting on our Debt & Raising the Debt Limit) - GOVT 101" S 2 EP 2
GOVT 101 – Federal Government Bouncing a HUGE Check (Defaulting on our Debt & Raising the Debt Limit)
The US hit the debt ceiling set by Congress on Thursday, January 19th, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default. According to Politico, Secretary of the Treasury Janet Yellen suggested such measures may last until early June. Other forecasters say it could be as late as September.
Ben White, with Politico January 19, 2023 article entitled, “Don’t freak out over the debt limit … yet laid out the politics surrounding the debt ceiling debate.
In the White House’s view, Republicans are on very poor political ground. Unlike 2010, they scored no big mandate for spending cuts in the 2022 midterms. Republicans raised the debt limit repeatedly under President Donald Trump without any spending cuts. And they were expected to romp in 2022 and only barely snared the House.
Democrats, meanwhile, will hammer them for the next several months about holding the economy hostage over giving the Treasury the ability to pay for spending commitments Congress has already made.
The White House team figures there will be a path to a relatively clean hike featuring Democrats and moderate Republicans from districts President Joe Biden carried. Which gets us to …
Why you should worry a bit. The main reason is that, in order to get the gavel, House Speaker Kevin McCarthy (R-Calif.) agreed that he would not push through any debt limit hike without significant spending cuts. And his speakership hangs on just one Republican deciding to force a vote to push him out. So hardline fiscal conservatives in the House Freedom Caucus will have outsized power. And making a deal that features mostly Democratic votes seems like it will be quite difficult.
This drama will run for the next five months and possibly more. It may look very grim and hopeless at times. It has before. But the U.S. has never defaulted. Anyone with a rudimentary understanding of economics knows it simply can’t be allowed to happen. So it’s reasonable — for now at least — to believe 2023 won’t be the year that Congress decides to vaporize the economy for absolutely no good reason.
This was Topless Government, the government and politics show. If you enjoyed it, I would be pleased if you would subscribe, rate, and review the show. We’re on YouTube and Facebook right now. Production is courtesy of Marcus Donovan, the Pasteurized Chief. You can check out his show – the District of Misfits Show – every Sunday evening. They go live at 10 pm. This show is a District Dogface Studios Production.
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CRS INSIGHT: “Extraordinary Measures” and the Debt Limit
CRS IN FOCUS Report: The Debt Limit
Debt-Limit-Letter-to-Congress-McCarthy-20230113
committee for a Responsible Federal Budget: Q&A: Everything You Should Know About the Debt Ceiling
Politico.com: Don't Freak Out Over The Debt Limit...Yet
Thehill.com: McCarthy Tries to get out of his box on debt ceiling
Thehill.com: Why the White House is refusing to negotiate on the debt ceiling
Bloomberg Government: What’s the Debt Ceiling, and Will the US Raise It?: QuickTake
