The United States government is about to hit the debt ceiling, or the maximum amount of money it’s allowed to borrow in order to pay its bills. The ceiling is currently set at $31.3 trillion.
Treasury Secretary Janet Yellen warned House Speaker Kevin McCarthy, R-Calif., that the government could reach the limit by Thursday, and when it does, she will have to take extraordinary measures to prevent a default. She cautioned that her efforts may only allow her to pay the government’s obligations through June. She said a government default on its loans would cause “irreparable harm to the U.S. economy.”
Now it’s on Congress to work out a deal. Republicans are saying any increase to the limit should be matched by decreases in spending, so the government’s expenditures don’t outsize its revenue.
“Why wouldn’t we sit down now, set a budget, set a path to get us to a balanced budget and let’s start paying this debt off and make sure the future generation has as many opportunities as we do,” Speaker McCarthy said.
Senate Democrats and the White House counter that they want to pass a debt ceiling increase without any strings attached. The two sides will have to negotiate to prevent an impasse.
“As President Biden has made clear, Congress must deal with the debt limit and must do so without conditions. But Congressional Republicans are threatening to hold the nation’s full faith and credit, a mandate of the constitution, hostage to their demands,” White House Press Secretary Karine Jean-Pierre said.
McCarthy appeared to indicate that a clean debt ceiling increase, without adjustments to the budget, is off the table.
“I don’t see why you would continue the past behavior,” McCarthy said.
