Policy- The US could default on its debt this summer if Congress doesn't raise the debt ceiling.
- But Democrats are accusing the GOP of holding the debt ceiling "hostage," as they have yet to put forth a concrete plan.
Americans could lose millions of jobs and be plunged into a recession as soon as this summer if Congress doesn't step up to finally address the debt ceiling. And right now, there seems to be no viable movement towards fixing the looming crisis.
It's been over three months since Republicans took over a majority in the House, and from the start, they vowed to use raising the debt ceiling as leverage to achieve spending cuts on Democratic priorities. Meanwhile, Democrats want a clean raise, with no spending cuts attached.
While some members and factions in the GOP have released wish lists for cuts, party leadership has yet to come out with a unified plan.
The House Freedom Caucus and GOP budget committee, for example, put forth a series of items in which they would support cutting spending to raise the debt ceiling, and GOP lawmakers even released the names of over 500 bills last week, each of which highlighted an area to cut funding, like environmental and racial equity programs.
Texas Rep. Chip Roy also highlighted some spending cut possibilities on Twitter on Monday, like "ending the silliness of bankrolling the World Health Organization."
—Chip Roy (@chiproytx) April 3, 2023
But Democrats are still waiting for a concrete plan to save the US from defaulting on its debt.
"Republicans are STILL holding the debt ceiling hostage," Congressional Progressive Caucus Chair Pramila Jayapal wrote on Twitter. "Their obstruction could result in millions of jobs lost, paychecks missed for workers across the country, and a stop on loans for small businesses. They must stop playing games with people's livelihoods."
At the same time, some centrists are reportedly formulating a secret plan to address the crisis on their own — to the chagrin of the White House. Politico reported that a "rogue band" of Democratic moderates have begun a crafting an emergency plan with centrist Republicans, although it doesn't have clear specifications yet. However, that plan does not have the seal of approval from the Biden administration or Democratic leaders, per Politico, since it could undermine Democrats' messaging around inaction on raising the limit and their push to raise it without conditions.
Democratic lawmakers have previously highlighted the catastrophe for Americans that will likely result should Congress fail to raise the debt ceiling. A report from the Joint Economic Committee in March said that Americans could lose $20,000 in retirement savings and private student-loan borrowers could see their monthly payments surge if the country defaults on its debt.
Republicans have also floated prioritizing what bills the country will pay should it reach that point. Treasury Secretary Janet Yellen has said that that approach is "just default by another name."
But Speaker of the House Kevin McCarthy and his GOP colleagues are adamant that President Joe Biden meet with them to negotiate an agreement. In a letter to the president last week, McCarthy wrote that he is "incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out-of-control government spending alongside an increase of the debt limit."
"Mr. President, simply put: you are on the clock," McCarthy wrote. "It's time to drop the partisanship, roll up our sleeves, and find common ground on this urgent challenge."