President Joe Biden and House Speaker Kevin McCarthy’s talks on Wednesday are about more than a Washington power game.
If the two most important leaders in Washington can’t agree to lift the debt ceiling by the time the Treasury runs out of money to pay its debts, the United States – the world’s fabled economic safe haven – could go into default.
Every American could get hurt in the ultimate demonstration of how partisan politics, including growing conservative extremism, is threatening the country’s ability to govern itself and could doom it to a self-inflicted disaster.
Because the government typically spends more than it takes in through revenues, it must borrow money to pay for commitments that Congress has already made.
So, if lawmakers don’t grant more lending authority by mid-summer, Social Security retirement payments will be on the line. Veterans could stand to lose their vital health and living benefits. Americans whose 401(k) funds are locked into stocks could see their savings plummet in a global market crash. Borrowing costs for consumers would also likely spike, potentially plunging the economy into a recession that could choke job growth and cause widespread misery.
The Republican speaker and Democratic president have been amping up for days by digging into positions from which it will be hard to retreat. Both sides are effectively betting that the consequences of failure would be so hideous, and politically ruinous, that the other side will blink first. But what is so frightening in this game of economic Russian roulette is that, just maybe, both sides will stand firm.
McCarthy heads into Wednesday’s meeting with an impression – largely rooted in his right-wing House majority’s rhetoric and his own strategizing – that he’s there to negotiate. But Biden says there can be no negotiating on such a cliff…
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