This spring, Congress finds itself standing at a familiar precipice. Once again, if lawmakers don’t agree to suspend or raise the debt ceiling, the federal government risks defaulting on its loans, which would likely cause a massive economic crisis. Currently, House Republicans are on the verge of passing a bill they view as an opening salvo to negotiations.
It’s a position that congressional lawmakers have been in many, many times before, and it’s one that they have to resolve ahead of a default date that could come as early as June.
At issue is not whether the debt ceiling — a legal cap on how much the US can borrow — should be raised, but how. Democrats, led by President Joe Biden, insist that Congress pass a “clean” debt ceiling increase that does not include any trade-offs to guarantee its passage. House Republicans, meanwhile, are eager to pass spending cuts in exchange for approving any debt ceiling increase, with some saying they’re unwilling to compromise on this point.
This standoff has led to concerns that the US could come dangerously close to actually defaulting, which it came within 72 hours of doing in 2011. As that experience made clear, the fact that the debt ceiling is spurring a stalemate is nothing new.
“There is considerable deja vu,” David Kamin, an economic adviser for the Obama administration, previously told Vox.
The reason Congress continues to land in the same place is that raising or suspending the debt ceiling, much like funding the government, is something it must address on a regular basis. Every few years or so, Congress has to either increase or suspend the country’s debt ceiling as it accrues more debt. This debt comes from covering government expenses including paying for the military, health care programs, and Social Security.
If it fails to address the debt ceiling, Congress would ruin the US credit rating and put its ability to pay its bills in doubt. That would likely trigger a domestic…
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