Debt Ceiling Fight Kicks Into High Gear As Congress Gets Clearer Picture On When It Will Hit Borrowing Limit
On Monday, May 1, Treasury Secretary Janet Yellen and the U.S. Congressional Budget Office both announced that the U.S. would hit its debt ceiling in early June and possibly as early as June 1. This announcement prompted President Biden to finally set up a meeting with Speaker Kevin McCarthy (R-CA) and the other leaders of the House and Senate in early May.
Getting that meeting is a big win for Republicans as it finally shows that presenting a plan and passing it has put Republicans in a strong negotiating position with Biden and a Democratic-controlled Senate. House Republicans passed the Limit, Save, Grow Act in late April and that bill represents the only plan, at the moment, to raise the debt ceiling and avoid an economic catastrophe while also addressing our country’s out-of-control spending problem in a commonsense manner. Senate Democrats have decided they’ll hold hearings to attack and rip the House Republicans’ bill while they continue to insist on passing a “clean” debt ceiling increase. Democrats say they’ll negotiate on spending and the budget after raising the debt limit but have yet to even present a “clean” debt limit increase bill for a vote in the U.S. Senate, a fact that Republicans have continually brought up.
Time is not on Washington’s side in this battle as the House is for 12 legislative days before the beginning of June while the Senate is in session for approximately 17 legislative days but crucially the House and Senate only overlap for 8 legislative days. House Democrats are attempting to introduce an arcane legislative proposal that would force a vote on the House floor of a clean debt limit increase. The only problem with this plan is that it would take too long to come to the floor due to House rules and the U.S. could breach the debt ceiling before it’s actually ready for action on the floor. To throw more cold water on Democrats’ plan to force a vote that takes out McCarthy and much of the House Republican caucus, moderate Republicans in the House are sticking with leadership and the demands to negotiate and find an agreement.
Should Republicans and Democrats not come to some sort of an agreement then a likely scenario is a short-term increase in the debt limit to give Congress and the White House more time to iron out a concrete proposal. Chad Pergram of Fox News has a great breakdown of the full state of play on the debt ceiling fight after the announcements by Yellen and the CBO.
The Limit, Save, Grow Act represents a commonsense proposal to raise the debt ceiling while crucially slowing the growth of government spending. FreedomWorks supports this bill and says the bill “would help ease the burden placed on hardworking American families and help return fiscal responsibility to our nation’s capital.” Congress and Biden need to come together and agree on a plan that responsibly raises the debt limit while also addressing the federal government’s growing spending so that the American economy can continue to grow and the U.S. debt doesn’t become an anchor on future generations. The only way this crisis truly gets resolved in a lasting manner is with negotiations between President Biden and Speaker McCarthy that results in an agreement that can clear the House and the 60-vote threshold in the Senate. These upcoming negotiations represent an excellent opportunity to get our country’s fiscal house in order for the long term.