WASHINGTON, D.C. — Days after politicians in Washington passed a measure to fund the government through December, they returned to Capitol hill in crisis mode again to face another looming deadline: making sure the government had money to spend.
On October 18, economists warn the United States will run out of cash, hitting the “debt limit” (or debt ceiling) authorized by congress. The limit, which stands around $28 trillion, can only be raised through a vote. The last time it was lifted was in 2019.
These votes, which help retain the legislature’s power of the purse, used to be routine. Recently, they’ve become more and more toxic. The US almost defaulted on its debt in 2011, though to this day it has always paid its bills.
We are at this point because politicians are bickering over spending. Republicans say they refuse to vote in favor of a ceiling increase this time around, citing Democrats’ plan to pass a $3.5 trillion dollar wish list, called the Build Back Better act. That’s in addition to a separate $1 trillion bipartisan infrastructure bill, though the two plans’ fates have been tied together by moderates and progressives.
In turn, Democrats point out much of the debt that needs to be paid for was created under the Trump administration.
“It is about spending that has already occurred,” Rep. Stephanie Murphy (D-FL) said.
Democrats have the ability to single-handedly raise the limit themselves, though it would be easier if the measure is bipartisan. While President Biden has been more aggressive in calling his opponents out, telling them they’re being reckless, the GOP isn’t blinking.
“They want that short cut so they can pivot back to partisan spending as fast as possible,” Senate Majority Leader Mitch McConnell (R-KY) said.
If a vote isn’t held, it would affect everyday Americans – including Central Floridians – directly.
While the exact effects of a default aren’t known since they’ve never happened before, economists predict a stock market crash triggered by shaken confidence in the government, which will shrink 401k and retirement plans.
The cost of goods would become more expensive, they say, due to rising interest rates. Social Security, Childcare Tax Credit and VA benefit payments could stop. Military personnel and postal workers could have their paychecks delayed.
“Our country would face financial crisis and economic recession as a result,” Treasury Secretary Janet Yellen told lawmakers.
There have been calls to balance the budget and reduce the deficit over the years, though few politicians have seriously sought to do that. Much of the deficit has been driven by politically popular items that reduced the government’s revenue, such as the Bush and Trump tax cuts, and increased spending like the military budget, Social Security and Medicare.
According to The Balance, Social Security alone will make up 1/6 of US spending in 2022.
So, who is to blame for the current situation embroiling Washington?
UCF politics professor Aubrey Jewett said progressive Democrats had probably overplayed their hand in demanding the Build Back Better Act, which has riled Republicans most.
“I would say that there’s been some overreach by progressives on the Democratic side in Congress,” he said. “Having said that, it’s an age-old strategy to go for the moon, go for the stars, and then, you know, accept a little less.”
However, he cautioned that Republicans’ strategy to force Democrats to shoulder all the responsibility could backfire.
“Republicans in the past have sometimes overplayed their hand on this, according to public opinion, anyway,” he said, indicating they could suffer in 2022 as a result of whatever transpires.
Cox Media Group