Now that Republicans control the House, they are threatening to prevent a debt-ceiling increase unless their demands for broad cutbacks are met—which could have dire economic consequences for Americans.
For those of you who don’t follow economics, or are too young to recall the political events of 2011 and 2013, the term “debt ceiling” refers to a statutory limit on how much the U.S. government can borrow. Ironically, Congress introduced the ceiling, more than a century ago, with the intention of making it simpler for the government to issue debt. For decades, it was increased regularly without much ado, but in the modern era it has been transformed by Republicans into a political weapon.
In a note issued on Tuesday, Daco warned that the debt-ceiling drama could have dire economic consequences. If the U.S. government did breach the ceiling, he pointed out, it would be unable to issue any additional debt and would have to immediately slash spending far enough so that it was covered by revenue—a cut of up to a trillion dollars on an annual basis. “This would mean an instantaneous cut to spending worth around 4.5-5.
On the other side of the aisle, congressional Democrats and the White House are insisting that they won’t negotiate over the debt ceiling. On Tuesday, Karine Jean-Pierre, the White House press secretary, re-stated this position. “This is just another attempt by congressional Republicans to force unpopular cuts on programs critical to seniors, the middle class, and working families,” she said.
Yet, even if Republican and Democratic leaders could agree on a last-ditch deal to raise the debt ceiling, would Roy and his colleagues in the Freedom Caucus go along with it? “My concern is that, even after all the Kabuki theatre, the Republican die-hards in the House are still going to demand things that are unacceptable,” Manley said. “They want to burn the place down.”
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