TL;DR and data thread: potential effects of a debt default if the U.S. federal government exhausts extraordinary measures and fails to raise the debt ceiling
Biden left out the possibility of invoking the 14th amendment in case Congress doesn't reach a bipartisan agreement»
@msnbc: The president sat down to discuss his 2024 re-election bid and the ongoing fight to raise the debt limit.
[00:03:30] *In the taped interview for MSNBC previewed on Friday, Biden left out the possibility of invoking the 14th amendment in case Congress doesn't reach a bipartisan agreement so the United States government avoids a default.
McConnell warns he won’t back debt-ceiling increase without ‘substantive’ reforms »
thehill.com: Senate Minority Leader Mitch McConnell (R-Ky.) has signed onto a letter stating he and more than 40 members of the Senate GOP conference will not back “any bill that raises the debt ceiling without substantive spending and budget reforms,” according to sources.
“The Senate Republican conference is united behind the House Republican conference in support of spending cuts and structural budget reform as a starting point for negotiations on the debt ceiling,”
[Transcription] The letter is being led by conservative Sen. Mike Lee (R-Utah), who wants to ensure that Republicans can sustain a filibuster of a clean bill to raise the debt ceiling, which is what Democrats are demanding.
President Biden Meets with Investing in America Cabinet »
whitehouse.gov: Remarks by President Biden in Meeting with His Investing in America Cabinet.
[Transcription] [Excerpts]
Unfortunately, our — I won’t say “Republican” because I think they’re not; they’re pretty well divided — but our MAGA Republicans in Congress are threatening to undo all this progress by letting us, quote, “default” on the debt unless we agree to their demands.
The two are totally unrelated. Whether you pay the debt or not doesn’t have a damn thing to do with what your budget is — what your budget is, where you’re going to spend money, how you’re going to raise the money, how — what are you going to cut, what are you going to —
🔹c-span.org: President Biden called the latest jobs report “good news” as he met with his economic team at the White House. During this meeting he also reiterated the debt ceiling must be raised without conditions attached to it. His reiteration came as he’s set to meet with congressional leaders on this topic the following week. Republicans have threatened to not raise the debt ceiling unless there are cuts to federal spending.
White House reportedly mulls short-term debt ceiling extension »
@kaylatausche: As we just reported on @CNBC -- White House is weighing the possibility of a shorter-term debt ceiling extension to avert a default and allow the parties to keep negotiating, per four sources Key question: What GOP would want in return to back that option and for how long
☑️ #46 May 4, 2023
CN Could 'Exploit' US Debt Ceiling Crisis, Warns Top Pentagon Leaders»
c-span.org: Intelligence Officials Testify on Worldwide Threats
[Transcription] Director of National Intelligence Avril Haines and Defense Intelligence Agency Director Lt. Gen. Scott Berrier testified on worldwide threats before the Senate Armed Services Committee. Topics included reauthorizing Section 702 of the Foreign Intelligence Surveillance Act, the Russia-Ukraine war, U.S. competition with China, Haiti, artificial intelligence, and other emerging global threats. They also addressed how foreign adversaries could use a default on the debt for misinformation campaigns. A closed classified briefing followed the hearing.
[Chairman Reed, Jack Reed D-RI] Thank you very much, General. Uh Thank you both for your detailed thoughtful testimony. Uh Director Hanes, uh Secretary Yellen indicated that we will um exceed the debt limit by June 1st requiring action before that have the intelligence community assessed the international consequences of default on our debt.
[00:31:29] Thank you, Chairman. So we don't have certainty on the outcome of the financial markets nor countries' opinions of sort of economic and political leadership that might be affected by a default on the debt. But I would say that what our assessment is is that regardless of its, you know, duration of a default duration, almost certainly, it would create global uncertainty about the value of the US dollar and US institutions and leadership leading to volatility in currency in financial markets and commodity markets that are priced in dollars. And that's basically as far as our analysts are able to provide
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Thank you, Chairman. There's no certainty on the outcome of the financial markets and might be affected by a default on the debt but would say that what our assessment is is regardless of duration of is certainly creating global uncertainty about the value of the U.S. dollar and institutions and leading to volatility and currency and financial markets and commodity markets priced in dollars and that' basically as far as our analysts can provide. Any kind of difficult and any indication that china in particular is preparing for exploitation of this through disinformation in the iron states or through financial or other moves?
Other [Clip]
Director of National Intelligence Avril Haines tells that China and Russia would likely seek to exploit a scenario where the U.S. defaults on its debt this summer, saying that it would be "almost a certainty that they would look to take advantage of the opportunity" to demonstrate "that we're not capable of functioning as a democracy."
@SenRickScott: While Republicans are putting forward solutions that return fiscal sanity to the nation, @JoeBiden and @SenateDems are refusing to negotiate or change their broken ways of high taxes and reckless spending that are putting the American dream at risk.
White House: Nothing is off the table on debt limit extension »
whitehouse.gov: Press Briefing by Press Secretary Karine Jean-Pierre, NSC Coordinator for Strategic Communications John Kirby, and OMB Director Shalanda Young
[Transcription] [Excerpt]
Q So it sounds like from your answer to Kevin’s question that you’re not taking a short-term stopgap off the table. If Congress were to send the President a bill that would waive the debt ceiling — let’s say through the end of September — he would sign it?
MS. YOUNG: I mean, right now — remember where our debate is. We’re in the “take it or leave it” phase from congressional Republicans. At least that part of the conversation about length — I would love to be in that part of the conversation because we’re at least in the positive; default is off the table.
So I’m happy when we get to that part of the conversation. We’re not there yet. And the idea is to brinks- — put brinksmanship to bed and get to talking on making sure we avoid default.
Moody's: US govt likely to run out of cash by June 8 »
@Markzandi: I testified on the debt limit before Senate Budget this am. There were bouts of partisanship, but I was impressed by the moments of bipartisanship. I’m more sure we won’t default. But lawmakers must act now, as June 8 is the X-date when Treasury can’t pay all the bills on time.
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@Markzandi: The exact timing of the X-date is uncertain given the uncertainty regarding tax revenues, but April tax collections have been weak – 1/3 less than last year. While June 8 is most likely X-date, there is a meaningful probability it is as soon as June 1. Best case is August 8.
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@Markzandi: This is an especially bad time to battle over the debt limit. Recession risks are uncomfortably high, as the economy is struggling with the Fed’s aggressive rate hikes and the fallout from the banking crisis. Adding the drama of a debt limit battle may be too much to bear.
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@Markzandi: But there is a viable political path forward. Since the X-date is at hand, suspend the debt limit until the start of the new FY on Oct 1st. At that time pass legislation increasing the debt limit without strings, pushing it to the other side of next year’s election…
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@Markzandi: …and at the same time pass legislation funding the government in FY 2024, which should be based on a fulsome debate over government spending levels, spending priorities and taxes. Both House Republicans and the President can claim victory and the economy will be spared.
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@Markzandi: Of course, this won’t address the nation’s long-term fiscal challenges. But ending the current debt limit battle with as little drama as possible is critical to avoiding a recession, which will make the daunting job of addressing our long-term fiscal problems even more difficult.
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@Markzandi: My written testimony from today can be found here:
White House details ‘severe damage’ to the economy if debt ceiling crisis occurs»
whitehouse.gov/cea: The Potential Economic Impacts of Various Debt Ceiling Scenarios
[Transcription] [Excerpts] New analyses by both the Congressional Budget Office and the U.S. Department of the Treasury suggest the United States is rapidly approaching the date at which the government can no longer pay its bills, also known as the “X-date.” History is clear that even getting close to a breach of the U.S. debt ceiling could cause significant disruptions to financial markets that would damage the economic conditions faced by households and businesses. Real time data, shown below, indicate that markets are already pricing in political brinkmanship related to Federal government default through higher risk premia.
An actual breach of the U.S. debt ceiling would likely cause severe damage to the U.S. economy. Analysis by CEA and outside researchers illustrates that if the U.S. government were to default on its obligations—whether to creditors, contractors, or citizens—the economy would quickly shift into reverse, with the depth of the losses a function of how long the breach lasted. A protracted default would likely lead to severe damage to the economy, with job growth swinging from its current pace of robust gains to losses numbering in the millions.
Table 1: Estimated Economic Effects of Debt Ceiling Standoff: Q3 2023. Source: Council of Economic Advisers
Senate Republicans Are Shoulder-To-Shoulder With Speaker McCarthy On Debt Limit Negotiations »
republicanleader.senate.gov: As Democrats Are Fracturing Over Their Leadership’s Complete Failure To Act On The Debt Ceiling, Senate Republicans Stand Squarely With Speaker McCarthy
🔹republicanleader.senate.gov | Senate Republicans Are Shoulder-To-Shoulder With Speaker McCarthy On Debt Limit Negotiations
McConnell: Senate alone can't decide on debt limit »
@WashingtonPost: Senate Minority Leader Mitch McConnell (R-Ky.) on May 2 downplayed the parallels to the 2011 debt ceiling talks while not ruling out his future involvement in negotiations
🔹republicanleader.senate.gov | After Months Of Delay, Biden Finally Blinks On The Debt Ceiling Following Speaker McCarthy’s Action
Biden invites congressional leaders – including McCarthy – to meet May 9 on debt limit»
cnn.com: President Joe Biden on Monday called the top four congressional leaders, including House Speaker Kevin McCarthy, to discuss raising the debt ceiling at the White House later this month, following months of an impasse between the president and House Republicans.
A White House official told CNN on Monday that at the proposed meeting with congressional leaders, Biden “will stress that Congress must take action to avoid default without conditions, and invited the four leaders to the White House to discuss the urgency of preventing default, as well as how to initiate a separate process to address the budget and fiscal year 2024 appropriations.”
I am writing to follow up on my previous letters regarding the debt limit and to provide additional information regarding the Treasury Department’s ability to continue to finance the operations of the federal government.
In my January 13 letter, I noted that it was unlikely that cash and extraordinary measures would be exhausted before early June. After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time. This estimate is based on currently available data, as federal receipts and outlays are inherently variable, and the actual date that Treasury exhausts extraordinary measures could be a number of weeks later than these estimates.
It is impossible to predict with certainty the exact date when Treasury will be unable to pay the government’s bills, and I will continue to update Congress in the coming weeks as more information becomes available. Given the current projections, it is imperative that Congress act as soon as possible to increase or suspend the debt limit in a way that provides longer-term certainty that the government will continue to make its payments.
Additionally, Treasury is suspending the issuance of State and Local Government Series (SLGS) Treasury securities. SLGS are special-purpose Treasury securities issued to states and municipalities to help them comply with certain tax rules. When Treasury issues SLGS, they count against the debt limit. Treasury will take this action to manage the risks associated with the debt limit, but it is not without costs, as it will deprive state and local governments of an important tool to manage their finances.
We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States. If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.
I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible.
White House: US has never been a deadbeat nation »
whitehouse.gov: Press Briefing by Press Secretary Karine Jean-Pierre
[Transcription] [Excerpts]
Q House Republicans passed legislation on the budget and debt limit. What is the White House’s response to this? And do you feel like the ball is in your court now to, you know, start negotiations with House Republicans as the next move?
MS. JEAN-PIERRE: So, a couple of things I want to say about this. Let’s — let’s just take a step back for a second. The United States have never — has never in our history failed to pay our debts. That is something that we have never done ever, again, in our history of this country. We’re not a deadbeat nation. Avoiding default is Congress’s responsibility. And they should act in — on it without preconditions as they have done in Democratic and Republican administrations, and they should do that immediately.
Q — does it have to — that doesn’t mean anything? It has to be a clean bill before the President will sit down at all and talk?
MS. JEAN-PIERRE: We have said very clearly: They need to deal with what’s at stake here, what’s at hand, which is the — our e- — our economy, which is making sure that we do not default. We cannot be — we have never been — we’ve never been a deadbeat nation. And this is not the time to do that.
White House: Debt ceiling bill has no chance of becoming law »
whitehouse.gov: Statement from White House Press Secretary Karine Jean-Pierre
[Transcription] House Republicans have passed a bill that cuts veterans’ health care, education, Meals on Wheels, and public safety, takes away health care from millions of Americans, and sends manufacturing jobs overseas while they fight to extend the Trump tax cuts for the wealthiest and profitable corporations. President Biden will never force middle class and working families to bear the burden of tax cuts for the wealthiest, as this bill does. The President has made clear this bill has no chance of becoming law. In our history, we have never defaulted on our debt or failed to pay our bills. Congressional Republicans must act immediately and without conditions to avoid default and ensure that the full faith and credit of the United States is not put at risk. That is their job. Economists have warned that default could spark a dangerous financial crisis, lead to a recession costing millions of Americans their jobs, endanger hard-working Americans’ retirement savings, and increase long-term federal borrowing costs, adding to deficits and debt. We are not a deadbeat nation.
As President Reagan said:
“The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility — two things that set us apart in much of the world.”
We pay our bills. Congressional Republicans must do that again now and act to avoid default.
speaker.gov: House GOP Leadership Statement on Passage of the Limit, Save, Grow Act
[Transcription] Washington, D.C. – Today, Speaker Kevin McCarthy (CA-20), Majority Leader Steve Scalise (LA-01), Majority Whip Tom Emmer (MN-06), Conference Chairwoman Elise Stefanik (NY-21), and Budget Committee Chairman Jodey Arrington (TX-19) issued the following statement on the passage of legislation to responsibly address the debt ceiling, the Limit, Save, Grow Act of 2023.
“House Republicans just delivered a plan that will address the country’s debt crisis. Our conference came together to pass the only plan in Washington that will tackle the debt ceiling, stop excessive federal spending and inflation, and put our country back on track for sustained economic growth.
“Today’s vote also sends a clear message to President Biden – continuing to ignore the problem is not an option. The President must come to the table to negotiate.
“The Limit, Save, Grow Act is a commonsense approach to return to fiscal sanity by putting an end to Democrats’ trillion-dollar spending sprees while ensuring Veterans, Medicare, and Social Security programs are strengthened and preserved. It will save taxpayers trillions of dollars by reclaiming unused Covid funds, stopping Biden’s student loan giveaway to the wealthy, and defunding his army of IRS agents. At the same time, it will promote a strengthened workforce to help lift more people out of poverty.
“Our plan will also boost American energy, lower energy costs for American families, and stop our dependence on foreign adversaries. We do all this by returning to fiscal spending levels from 2022, which Democrats, including President Biden, applauded and praised just 13 months ago.
“Unfortunately, President Biden and the Democrat-run Senate have been missing-in-action. They are more interested in crafting lazy political attacks than they are in solving the nation’s debt crisis. We owe the American people more than that. House Republicans are showing leadership. Time for Democrats to do their job.”
[Summarizer] Baha GmbH - The bill aims to lift the debt ceiling by $1.5 trillion, removing the risk of default. United States House of Representatives passed on Wednesday a bill aimed at raising the debt ceiling in exchange for a number of spending cuts. The bill was proposed by the Republican Party and passed narrowly 217 to 215 in the Republican-led House, but is expected to fail in the Senate, which is controlled by the Democrats.
Statement from White House Communications Director Ben LaBolt on Cut Growth Act Overnight Deals»
whitehouse.gov: [Transcription] Speaker McCarthy has cut a deal with the most extreme MAGA elements of his party to accelerate taking food assistance from hundreds of thousands of older Americans and to carve out one industry from his draconian cuts without making a single change to provisions that will strip away health care services for veterans, cut access to Meals on Wheels, eliminate health care coverage for millions of Americans, and ship manufacturing jobs overseas. House Republicans are selling out hard-working Americans in order to defend their top priority: restoring the Trump tax cuts for the wealthiest and corporations at a cost of over $3 trillion. President Biden will never sacrifice opportunity and economic security for working and middle-class families in order to pay for tax cuts for the wealthiest and corporations. Budgets are a statement of values — and House Republicans have made clear who they are fighting for.
☑️ #34 Apr 26, 2023
House vote on GOP debt bill likely to take place today »
punchbowl.news: GOP leadership reverses, overhauls debt limit bill
[Transcription] Happy Wednesday morning.
Let’s start here: House Republican leaders declared repeatedly over the last few days that they wouldn’t change their $4.8 trillion debt-limit package before it hit the floor. Speaker Kevin McCarthy and his top lieutenants vowed to muscle the Limit, Save, Grow Act through the chamber without altering the underlying measure.
But late Tuesday night, McCarthy’sleadership crew bent to an uncomfortable reality — the bill needed to be changed, so they changed it.
Following a marathon House Rules Committeemeeting that stretched into early this morning,House Republican leaders included an amendment softening a provision that repealed a host of biofuel tax credits. They did that to win over holdout Midwestern Republicans who threatened to sink the bill.
GOP leadership also accelerated implementation of strict work requirements for social safety-net programs to placate hardline conservatives who threatened to oppose the measure.
But they still have to pass their bill on the House floor.
McCarthy can only lose four Republican votes and pass the measure, which he hopes will kick off negotiations with President Joe Biden and Democratic leaders.
The House GOP leadership, which promised regular order and a floor open to amendments, made just one amendment in order: a tweak to the Limit, Save and Grow Act that, among other things, puts in place new work requirements for 2024 instead of 2025. Party leaders had previously said that change was unworkable.
More importantly, McCarthy’s leadership team eliminated the repeal of three biofuel tax credits. For the remaining two — created by the Democrats’ Inflation Reduction Act — the GOP said they didn’t apply to taxpayers who made investment decisions based on the credits.
In addition, the leadership-drafted amendment rescinds funding from the Inflation Reduction Act for green building construction, Energy Department loan guarantees, deferred maintenance for national parks, air pollution for states and municipalities and for a neighborhood access and equity grant program.
These tweaks are aimed at mollifying conservatives and Iowa Republicans, two pockets of resistance McCarthy faced, in order to pass this dead-on-arrival-in-the-Senate debt limit package.
We’ll know more about whether these changes took care of all of the problems inside the GOP conference after their closed-party meeting at 9 a.m. today.
But for everyone confident that the debt-limit dispute will eventually be resolved without a potentially disastrous default, let’s note that Republicans struggled mightily to rally behind a legislative package designed to give McCarthy some leverage in potential talks with Biden.
As of late Tuesday night, the nos were piling up. Genial Tennessee Rep. Tim Burchett is a “no,” as is perennial thorn-in-the-side Rep. Matt Gaetz (R-Fla.). House Freedom Caucus Chair Scott Perry (R-Pa.) has been non-committal publicly and privately. Rep. Andy Biggs (R-Ariz.) sounds skeptical, as do Reps. Matt Rosendale (R-Mont.) and Eli Crane (R-Ariz.). Rep. Nancy Mace (R-S.C.) told reporters she’s “still a no.”
And both GOP and Democratic leaders are also scrambling to head off attendance problems later this week as well.
Gripes from conservatives are nothing new for McCarthy. Remember January? Republican hardliners are known to get everything they want and still bellyache. CBO says this proposal cuts spending by $4.8 trillion over the next decade — which is exactly what conservatives want. But they’re still balking.
The Iowans, generally team players in the House GOP, have been the most difficult pocket to mollify. Party leaders underestimated the mettle of the four-person Iowa delegation and their unwillingness to roll back Democratic-passed tax breaks for the ethanol industry.
The operating theory inside leadership ranks was that Iowa Reps. Ashley Hinson, Zach Nunn, Mariannette Miller-Meeks and Randy Feenstra were team players, so they’d kowtow to McCarthy when he asked. But the Hawkeye State Republicans, led by Hinson, didn’t back down under pressure from the leadership. In fact, the leadership backed down.
Remember: Sen. Chuck Grassley (R-Iowa) is 89 years old. Hinson is 39, Nunn is 43, and Feenstra is 54. All of these House Republicans may be looking at the Senate as a viable next step.
McCarthy and other senior Republicans remain confident that they’ll pass the measure by week’s end. They note today will be the first time in weeks that House GOP lawmakers will all be in the same room.
When McCarthy was asked Tuesday how he’d limit potential GOP no votes, he responded: “The same way we’ve done it every week when you talk to me about every other bill we’re bringing to the floor.”
“I think we’re doing well. I think we’re doing fine,” House Majority Whip Tom Emmer insisted on Tuesday night. “It just depends on when the speaker decides he’s ready to go.”
Happening today: McCarthy and House Minority Leader Hakeem Jeffries are hosting a briefing today with MIT Professors Antonio Torralba and Aleksander Madry, experts in AI.
MIT runs an AI program for military officers. McCarthy had them develop a course to educate Congress about AI. “Whatever country captures AI and quantum first has an advantage and China’s not going to slow down,” McCarthy said Tuesday.
McCarthy is planning to have OpenAI’s Sam Altman in to talk to members as well.
New! RSVP to join us in person at The Roost or on the livestream on Wednesday, May 17 at 9 a.m. ET for our conversation with Rep. Nancy Mace(R-S.C.). We’ll discuss innovative approaches to job creation, economic growth and sustainability. This event is the conclusion of The Leaders, Punchbowl News’ spotlight on elected leaders at the center of their state and local economies, presented by Google.
– Jake Sherman, John Bresnahan, Mica Soellner and Max Cohen
@SpeakerMcCarthy: The Senate has done nothing. The President has done nothing. The House will lift the debt ceiling and limit the growth of Washington spending. --
McConnell urges Biden to talk debt limit with McCarthy »
@RepublicanLeader: It’s Past Time for President Biden to Negotiate with Speaker McCarthy
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@LeaderMcConnell: .@POTUS continues to not engage on the debt limit with @SpeakerMcCarthy. A position so absurd even fellow Democrats are not buying it. It’s past time for President Biden to stop the partisan stubbornness, join Speaker McCarthy at the grown-ups’ table, and get talking.
☑️ #31 Apr 25, 2023
Biden: Trump wouldn't use debt limit as negotiation tool »
whitehouse.gov: Remarks by President Biden at North America’s Building Trades Unions (NABTU) Legislative Conference
[Transcription] [Excerpt]
The Speaker likes to quote President Reagan. I love these guys — how they selectively quote people, including making up quotes for me. (Laughter.)
Well, President Reagan made it clear: We pay our debts. Here’s his quote from him. He said, “The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility — two things that set us apart in much of the world.”
Little did I think I’d be quoting Donald Trump. But even Donald Trump said, “I can’t imagine [anyone] ever thinking of using the debt ceiling as a negotiating wedge.”
And these guys are saying unless I agree to cut all these programs by 22 percent — which is growing the economy — and cut taxes for the super wealthy and corporations.
Folks, America is a not a deadbeat nation. We pay our bills.
Yellen: Not raising debt limit would cause catastrophe »
home.treasury.gov: Remarks by Secretary of the Treasury Janet L. Yellen at the Sacramento Metropolitan Chamber of Commerce’s 51st Annual “Capitol-to-Capitol” Program As
[Transcription] [Excerpt]
DEBT LIMIT
Now, I wish I could continue to speak about our historic investments in the American economy. But I need to use my remaining time to address an issue that could threaten all the progress that we’ve made over the past two years.
As many of you know, I have asked Congress to raise or suspend the debt limit. Since 1789, the United States has paid all of our bills on time. It should stay that way. In my assessment – and that of economists across the board – a default on our debt would produce an economic and financial catastrophe. Many residents in Sacramento could ultimately lose their jobs. Household payments on mortgages, auto loans, and credit cards would rise. And American businesses would see credit markets deteriorate. On top of that, it is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security. In the longer term, a default would raise the cost of borrowing into perpetuity. Future investments would become substantially more costly.
This economic catastrophe is preventable. The solution is simple: Congress must vote to raise or suspend the debt limit. It should do so without conditions. And it should not wait until the last minute. I believe it is a basic responsibility of our nation’s leaders to get this done.
White House Press Secretary Karine Jean-Pierre: Avoiding default non-negotiable »
whitehouse.gov/briefing-room: [Transcription] [Baha GmbH ]White House Press Secretary Karine Jean-Pierre remarked on Monday at a press conference that United States President Joe Biden's administration will not negotiate over avoiding the debt ceiling.
Commenting on the Republican members of Congress and House Speaker Kevin McCarthy's stance, Jean-Pierre noted that "they can actually deal with something that would be devastating if they didn't take action." She reiterated that the Republicans are "holding the economy hostage" with their stern attitude toward the debt ceiling and spending cuts.
Jean-Pierre also said that the Republicans' take on the matter is taking steps to damage the country's economy "unless the president and Congress agree to their entire agenda."
McCarthy: in just the next 10 years, americans will end up paying $10.5t »
@SpeakerMcCarthy: Taxpayers are on the hook for $10.5 TRILLION in interest on the debt. That's just the interest payments—not even the debt itself. That's more than we've had to pay in the last 80 years. We owe it to the American people to negotiate a responsible debt limit increase.
@SpeakerMcCarthy: The problem is not that Washington doesn't have enough money. The government is collecting more than ever. The problem is Washington spends too much. And President Biden wants to spend even more money next year than we did at the height of the pandemic. It's unsustainable.
☑️ #26 Apr 20, 2023
Manchin statement on House Republican debt limit proposal »
manchin.senate.gov: Washington, DC - Today, U.S. Senator Joe Manchin (D-WV) released the following statement on the debt limit proposal announced by Speaker Kevin McCarthy and Republicans in the House of Representatives.
“America is facing a historic economic crisis brought on by an abject failure to address our exploding national debt, chronic inflation, a looming recession, and the more immediate need to raise the debt ceiling. Our elected leaders must stop with the political games, work together and negotiate a compromise.”
President Biden Delivers Remarks on his Vision for the Economy »
@WhiteHouse: President Biden delivers remarks contrasting his vision for the economy with MAGA House Republicans’ vision: an economy that grows from the middle out and bottom up instead of an economy that trickles from the top down.
[00:03:57] …go to the bottom. The threat of defaulting on America's debt, for the first time in 230 years. We've never ever defaulted on the debt. it would destroy the economy. who do you think it would hurt…
☑️ #24 Apr 19, 2023
President Biden’s reckless spending created record inflation, made us more dependent on China, and undermined Social Security and Medicare. Since he's been in hiding, House Republicans will take action by passing a responsible debt limit increase. »
@SpeakerMcCarthy: I'm headed to the House floor soon to announce the Limit, Save, Grow Act, which will responsibly lift the debt ceiling into next year and:
LIMIT federal spending
SAVE taxpayers trillions of dollars
GROW our economy
🔹speaker.gov | Speaker McCarthy’s Remarks on the Republican Plan to Address the Debt Ceiling
🔹speaker.gov | House GOP Leadership Statement on the House GOP Plan to Address the Debt Ceiling
☑️ #23 Apr 18, 2023
Debt limit deadline might be sooner than expected, economists warn»
axios.com: This tax day, there's slightly more at stake than usual. If federal tax collections are strong, that could push out the absolute deadline when the nation exhausts cash and borrowing capacity.
Yes, but: If tax receipts are weak, that drop-dead date could be reached sooner than anticipated — leaving less time for lawmakers to hash out a deal. The latter is beginning to appear more likely, according to Goldman Sachs.
Source: @BlakeMillardCFA and @carlquintanilla GOLDMAN: “weak tax collections so far.. suggest an increased probability that the debt limit deadline will be reached in the first half of June. .. little time to negotiate a deal .. While not our base case, a June deadline would make a short-term extension a plausible scenario.”
@nowthisnews: Senate Majority Leader Chuck Schumer Discusses U.S. Debt Ceiling
☑️ #21 Apr 17, 2023
McCarthy: House to vote on lifting debt ceiling soon »
@SpeakerMcCarthy: Speaker McCarthy's Speech at the NYSE about a Responsible Debt Ceiling Increase
Our national debt is too high. Far too high. And the problem is getting worse, not better. Mr. President, enough is enough—stop playing partisan games. Defaulting on our debt is not an option.
“think for a moment that is unsustainable over the next 10 years the United States will pay 10.5 trillion just an interest on our debt put that in perspective since 1940 until today we have paid 9 trillion of interest and are told of debt over 83 years 9 trillion and now we're going to pay 10.5 and 10.”
"In the coming weeks, the House will vote on a bill to lift the debt ceiling into next year, save taxpayers trillions of dollars, make us less dependent on China, and curb high inflation - all without touching Social Security or Medicare.”
"The longer President Biden waits to be sensible, to find agreement, the more likely it becomes that his administration will bumble into the first default in our nation’s history,"
McHenry: “I’ve never been more pessimistic about where we stand with the debt ceiling”
@PunchbowlNews: joined @apalmerdc@jakesherman yesterday to discuss debt-limit negotiations, the recent bank collapses and an upcoming oversight hearing.
@SpeakerMcCarthy: Mr. President: I'm incredibly concerned you are putting an already fragile economy in jeopardy by insisting upon your extreme position on the debt limit. It’s time to drop partisanship, roll up our sleeves, & find common ground on this urgent challenge. https://bit.ly/LimitSaveGrow
voteview.com: Voteview allows users to view every congressional roll call vote in American history on a map of the United States and on a liberal-conservative ideological map including information about the ideological positions of voting Senators and Representatives.
*Ideology scores come from DW-NOMINATE as of March 23, a spatial model of voting patterns that distributes members based on their congressional voting history. Newer members have taken fewer votes, so their positioning on the ideological spectrum is subject to more fluctuation.
Ideological spectrum + Debt Limit (estimated):
✅ Republican Study Committee: 173
FY 2023 Budget (annual alternative budget release planned in mid-april)
[Excerpt] I’ve spoken about the promise of the President’s Budget. But I’d be remiss if I did not mention a wholly separate issue that could threaten the economic progress that we’ve made. As you know, I have asked Congress to raise or suspend the debt limit.
Since 1789, the United States has always paid its bills on time. It must continue to do so. In my assessment – and that of economists across the board – a default on our debt would trigger an economic and financial catastrophe. I urge all members of Congress to come together to address the debt limit – without conditions and without waiting until the last minute.
House Freedom Caucus lays out spending cut demands to raise debt limit (podcast) »
c-span.org/podcasts: House Freedom Caucus sets spending reduction demands in exchange for supporting a debt ceiling increase, Treasury Secretary Yellen testifies before House committee on the debt limit & proposed FY'24 budget, House passes bill to declassify COVID-19 origin intelligence.
withehouse.gov/omb: On March 9th, President Biden released a budget outlining his vision to build on the work this Administration has done to make a real difference in people’s lives – investing in America, lowering costs for families, protecting and strengthening Social Security and Medicare, reducing the deficit, and more.
[Transcription] Remarks by President Biden on his Budget for Fiscal Year 2024 (Finishing Trades Institute Philadelphia, Pennsylvania)
[Excerpt] MAGA Republicans are threatening to default on the national debt — I keep talking about the national debt and the trillion -dollar debt. It took 200 years to accumulate that debt. It’s not recent debt. This is all the debt that’s been accumulating interest on the debt for over 200 years.
thehill.com: By Desmond lachman, Opinion contributor
[Transcription]
[Excerpt] A more recent example of the U.S. government reneging on its debt commitments occurred in August 1971, when President Nixon “temporarily” closed the U.S. gold window as part of his effort to regain control over inflation. By closing the gold window, the U.S. government abrogated a financial commitment it had made to the rest of the world at the Bretton Woods Conference in 1944 that set up the post-war monetary system.
At Bretton Woods, the United States had promised to redeem all U.S. dollars held for $35 dollars an ounce. When Nixon refused to let foreign central banks turn in their dollars for gold, he effectively “defaulted” on the United States’s long-standing obligations to make the dollar as good as gold.
A more recent, albeit lesser, example of the U.S. government reneging on its debt commitments occurredin 1968, when the government refused to honor its explicit promise to redeem its silver certificate paper dollars for silver dollars. When an embarrassingly large number of bearers of these certificates demanded the promised silver dollars, the U.S. government simply decided not to pay.
Powell: Fed has no tools to protect the economy from all the potential effects of a debt default »
financialservices.house.gov: Federal Reserve Chairman Jerome Powell to deliver semiannual monetary policy testimony before the House Financial Services Committee.
The Semi-Annual Monetary Policy Report of the Federal Reserve
Hearing video:
[00:48:04]
let me start briefly by saying we have no role in seek no role what is at the heart of fiscal policy I will limit myself to the two things other Fed chairs have said about this. Congress is the alternative there are no rabbits and hats to pull out on this. to no one should assume the Fed can protect the economy from the nonpayment of the government's bills. let alone a debt default of that nature. which we do not think will happen here.
[Report] Moody’s Analytics’ report, which outlines alternatives to a debt-limit bill, was a key feature of the hearing of the Subcommittee on Economic Policy.
Mark Zandi, chief economist at Moody’s, said an impending default would “be a catastrophic blow to the already fragile economy.”
“Global financial markets and the economy would be upended, and even if resolved quickly, Americans would likely pay for this default for generations, as global investors would rightly believe that the federal government’s finances have been politicized and that a time may come when they would not be paid what they are owed when owed it”
Yellen: Essential to stop economic and financial catastrophe »
cnn.com: Yellen says ‘so far, so good’ in US inflation battle
[Transcription]
[Excerpt] She said it would be “inconceivable” for the United States — “whose currency, the dollar, serves as the world’s reserve currency; a country with the deepest most liquid financial markets where Treasuries are the ultimate safe asset” and “with a credit rating the United States has always had” — to default on its obligations.
@USCBO: CBO projects that, if the debt limit is not raised or suspended, the government’s ability to issue additional debt—other than to replace maturing securities—will be exhausted between July and September 2023.
The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations.
Biden: I’m simply not going to let the nation default on its debt for the first time in history »
whitehouse.gov: Remarks by President Biden at the National Association of Counties (NACo) Conference
United States President Joe Biden reiterated on Tuesday that he will not allow the country to default on its obligations by failing to pass a new debt ceiling.
[Transcription]
[Excerpt] But here’s the bottom line: I’m simply not going to let the nation default on its debt for the first time in history. America is a nation that’s paid its bill for the last 200 years.
Yellen: Raising debt limit 'a basic responsibility' »
home.treasury.gov: Secretary Janet Yellen's Remarks at the National Association of Counties 2023 Legislative Conference
[00:24:05]
As many of you know, I have asked Congress to raise or suspend the debt limit. Since 1789, the United States has paid all of our bills on time. It should stay that way. In my assessment — and that of economists across the board — a default on our debt would produce an economic and financial catastrophe. Many of your residents could ultimately lose their jobs. Household payments on mortgages, auto loans, and credit cards would rise, and American businesses would see credit markets deteriorate. On top of that, it is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security. In the longer term, a default would raise the cost of borrowing into perpetuity. Future investments — including public investments — would become substantially more costly.
This economic catastrophe is preventable. The solution is simple: Congress must vote to raise or suspend the debt limit. It should do so without conditions. And it should not wait until the last minute. I believe it is a basic responsibility of our nation’s leaders to get this done.
So the debt limit is really something for the fiscal authorities to deal with. the Fed - - our only role in this, we're the fiscal agent of the treasury department. we're not a policymaker on this. I will say this, this can end one way and that's with congress raising the debt limit in a timely fashion so the united states can pay its bills when it's due. if that doesn't happen no one should think that the fed has the ability to shield the financial markets or the economy from the consequences of moving too slow.
Washington Today Podcasts: POTUS-Speaker McCarthy agree to continue talking about raising debt ceiling»
factba.se [President’s Public Schedule]: The President hosts Speaker McCarthy for a meeting at the White House to discuss a range of issues - Oval Office -Closed Press
Yellen warns of global financial crisis if debt ceiling not agreed »
@CNN: In an exclusive interview with CNN's Christiane Amanpour, US Treasury Secretary Janet Yellen lays out potential issues that could arise if the federal government exhausts extraordinary measures and fails to raise the debt ceiling
[00:02:00] …U.S. Treasury Securities are the safest investment on the planet
[00:02:46] …it could cause a global financial crisis . it would certainly undermine the role of the dollar as reserve currency that is used in transactions all over the world
☑️ #2 Jan 19, 2023
Yellen: the extraordinary measures Treasury began using today »
[Excerpt] I write to keep you apprised of actions the Treasury Department is taking in regard to the debt limit. In my letter of January 13, 2023, I noted that Public Law 117-73 increased the statutory debt limit to a level of $31.381 trillion, and informed you that beginning on January 19, the outstanding debt of the United States was projected to reach the statutory limit. This letter serves to notify you, pursuant to 5 U.S.C. § 8348(l)(2), of the extraordinary measures Treasury began using today.
[Excerpt] I am writing to inform you that beginning on Thursday, January 19, 2023, the outstanding debt of the United States is projected to reach the statutory limit. Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations.
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