Congressional leaders will meet with President Joe Biden next week to discuss the debt ceiling. The May 9 meeting at the White House will include Speaker Kevin McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer, and Senate Minority Leader Mitch McConnell.
This meeting takes place against the backdrop of the Congressional Budget Office’s (CBO) Monday announcement that decreased tax receipts make a default look more likely.
“Because tax receipts through April have been less than the Congressional Budget Office anticipated in February, we now estimate that there is a significantly greater risk that the Treasury will run out of funds in early June. We are providing this information in response to questions from lawmakers about our projections of revenues for the current year and the implications for the debt ceiling,” CBO said in a statement. “If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government will ultimately be unable to pay its obligations fully. As a result, the government will have to delay making payments for some activities, default on its debt obligations, or both.”
A Looming Default
Treasury Secretary Janet Yellen similarly warned Monday in a letter to Speaker Kevin McCarthy that the federal government could default on its obligations as soon as June 1 unless Congress extends the debt ceiling.
““It’s time to put aside partisan interests and do what is right and necessary for the American people to avoid a first-ever U.S. government default that crashes the stock market, raises costs on families and jeopardizes retirement savings,” Schumer and Jeffries said in a statement.
Who’s to Blame?
Both sides blame the other for the looming crisis.
Biden wants an unconditional debt ceiling increase. Republicans want serious cuts in the rate of the growth of the federal budget by at least $4.5 trillion over the next decade. The bill passed by the House would raise the debt ceiling by $1.5 trillion.
Republicans imposed limits on programs favored by Democrats, including Green energy tax credits. It orders the Secretary of the Interior to resume allowing oil drilling on federal lands and returns unspent COVID funds to the Treasury.
Speaker Kevin McCarthy tweeted last week that the Republican plan returns spending levels to where they were in 2022.
“It’s not radical—it’s responsible,” McCarthy said.
The GOP plan, however, does not specify what programs would be cut and by how much. It merely imposes a limit on how much would be spent.
“House Republicans did their job and passed a responsible bill that raises the debt ceiling, avoids default, and tackles reckless spending,” McCarthy said in a statement. “The Senate and the President need to get to work — and soon.”
The White House argues this would result in a 22% reduction in non-defense spending, putting housing vouchers, food aid and basic medical care at risk.
“We pay our bills and we should do so without reckless hostage-taking from some of the MAGA Republicans in Congress,” Biden said.
Veterans Affairs Committee Chairman Mike Bost, R-Ill., countered Democrats saying that no veterans benefits would be cut.
Sen. Mitt Romney, R-Utah, noted that both sides should cool down their rhetoric and collaborate, “saying that when we have a divided government, that’s what happens, so sit down, get a deal done and don’t scare the pants off the people of America.”
John Rossomando was a senior analyst for Defense Policy and served as Senior Analyst for Counterterrorism at The Investigative Project on Terrorism for eight years. His work has been featured in numerous publications such as The American Thinker, Daily Wire, Red Alert Politics, CNSNews.com, The Daily Caller, Human Events, Newsmax, The American Spectator, TownHall.com, and Crisis Magazine. He also served as senior managing editor of The Bulletin, a 100,000-circulation daily newspaper in Philadelphia, and received the Pennsylvania Associated Press Managing Editors first-place award in 2008 for his reporting.
T Paine
May 4, 2023 at 8:38 am
We don’t have a taxation problem in Washington, we have a spending problem and BOTH sides of the aisle are to blame. It used to be Republicans were the responsible adults in the room. Today, both sides are spending us into oblivion.
Do the math:
$4.89 Trillion – 2022 Federal Revenue
$6.27 Trillion – 2022 Federal Spending
Little wonder why we are $31.7 Trillion in the hole. And the hole is only getting deeper by the second.
Rick
May 4, 2023 at 11:11 pm
The author has a very skewed sense of reality. Your have a group of intransigent far right republicans holding a weak Speaker hostage. McCarthy is threatening default in hopes of keeping his job by mollifying the MAGA group They refuse to look at options to raise FICA revenue in order to protect the rich…gotta get those donations, ya know. Republican tax cuts under TFG are adding $1.7 trillion to the deficit.
A simple fix to protect and fund SS/Medicare is to remove the FICA income cap and include all bonuses. Under the current law bonuses are not subject to FICA, which saves the company the matching percent and the rich executives, as well. Quite an incentive.
I’m sure there will be those whose opinion’s differ, but ask yourself why those with staggering wealth pay little to no tax. And while your at it think about who will ultimately pay for the deficit…it’s not those who have been successful in lobbying (paying) politicians to do their bidding.
Yrral
May 4, 2023 at 11:27 pm
When American find their saving wipe out by bank failure,the US Treasury is the only thing keeping bank from imploding,when they lose the ability to borrow,bank will collapse like dominos,taking people hope and dreams with them,I do not believe in the Fed conspiracy,the FED had become it worst enemy,by letting bankers regulate the bank,their should be a civilian review board,run by people with financial expertise, watching the antics of banks,by the way under Fed rules,the banks do not have your cash on hand and limits the amount of your withdrawal monthly in person Google Bank Reserve Requirement
len
May 5, 2023 at 11:06 am
A trillion is an astronomical number to mentally grasp.
To put a trillion dollars into perspective.
If you were paid at the rate of $1 per second, accumulation times would be as follows.
To accumulate a million dollars would take 12 days
To accumulate a billion dollars would take 32 years
To accumulate a trillion dollars would take 31,688 years
The ‘US National Debt’ is currently 31.7 trillion dollars. It would take 1,004,509.6 years to payoff the debt at the 1 dollar per second rate. That is assuming no additional interest is added from today. Unfortunately the US Federal Government accumulates debt at a rate much faster than 1 dollar per second.