The United States of America is now within five billion dollars of it’s legal DEBT CEILING and unless the . . . REPUBLICAN. . . House of Representatives takes action, the US will default on its obligations within a month. THAT would crash the global economy.
The U.S. government is on track to max out on its $31.4 trillion borrowing authority as soon as this month. That starts the clock on an expected standoff between President Joe Biden and House Republicans. Default looms with the global economy at stake.
Once the government bumps up against the cap — it could happen any time in the next few weeks or longer — the Treasury Department will be unable to issue new debt without congressional action. The department plans to deploy what are known as “extraordinary measures” to keep the government operating. But once those measures run out, the government could be at risk of defaulting unless lawmakers and the president agree to lift the limit on the U.S. government’s ability to borrow.
The expected showdown over the debt limit would be a stark display of the new reality for Biden and his fellow Democrats, who enjoyed one-party control of Washington for the past two years. It would presage the challenges to come in achieving even the modest ambitions that Democrats are bringing to the task of legislating in a divided Capitol.
The White House has insisted that it won’t allow the nation’s credit to be held captive to the demands of newly empowered GOP lawmakers. But it has no choice. The Constitution gives to CONGRESS the sole power to spend money and unless Congress ups the limit, the Biden Administration is dead in the water, financially.
Moreover, the concessions made by new House Speaker Kevin McCarthy in his arduous path to securing the job raise questions about whether he has the ability to cut any kind of deal to resolve a standoff.
With this kind of leverage at their disposal, House Republicans can make certain __their__ pririties are met. Like canceling the 87,000 new IRS Agents. The House passed a Bill to do just that, as their first order of business last week. But Biden has already said he will Veto that bill.
But when it comes time to negotiate over the debt ceiling, things like that will come back to bite Biden.
The stakes are treacherous. Past forecasts suggest a default could instantly bury the country in a deep recession, right at a moment of slowing global growth as the U.S. and much of the world face high inflation because of the coronavirus pandemic and Russia’s invasion of Ukraine.