Sep 18, 2021 08:39 PM
US debt limit struggle once again raises specter of catastrophic default
https://www.voanews.com/a/us-debt-limit-...33421.html
EXCERPTS: Unless Congress votes to increase the amount of money the U.S. Treasury is allowed to borrow above its current debt of $28.5 trillion, the United States will default on its financial obligations sometime in the next several weeks, experts warn. Few experts consider that likely to happen, but if it did, it could trigger an economic catastrophe with effects far beyond America's shores.
[...] With that crisis looming, Democrats and Republicans in Washington are battling over who should take responsibility for the politically unpopular task of raising the cap on borrowing, commonly known as the debt limit. Republicans, led by Senate Minority Leader Mitch McConnell, have vowed that not a single one of them will vote to raise the limit.
For their part, Democrats say that much of the spending the increased debt would finance is the result of policies passed by a Republican-led Congress and signed by a Republican president, Donald Trump. Therefore, they argue, the GOP should participate in raising the limit.
'The strange thing about the current debate is that there is absolutely no disagreement between the parties about what should happen. In an interview with the [u]Louisville Courier-Journal[/u[ in his home state of Kentucky last week, McConnell was explicit, saying that "America must never default" and "the debt ceiling needs to be raised."
However, McConnell said, Republicans will not provide any votes to make that happen. What he is demanding the Democrats do is raise the debt limit unilaterally, using a process called "budget reconciliation," which would make it impossible for Senate Republicans to block a vote on the measure.
McConnell's stance has angered Democrats, who point out that enforcement of the debt ceiling was suspended three times during the four years of the Trump presidency, each time with Democratic support for allowing the debt to rise.
[...] Many in Washington believe the debt ceiling will be raised before the U.S. defaults, but they aren't sure of the mechanism. ... "We know what's going to happen, but we don't know how it's going to happen," said Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, a government spending watchdog. "At the end of the day, one way or another, politicians will raise or suspend the debt limit. The United States cannot and will not default on its obligations. And so somebody is going to budge. But the question is, who blinks first?"
[...] The Biden administration has been trying to increase the political pressure on McConnell and congressional Republicans to force them to participate in a debt limit increase.
On Wednesday, Yellen spoke with McConnell on the phone. The White House said the purpose of the call was to "convey what the enormous dangers of default would be." But a spokesperson for McConnell made it clear that the conversation had not moved the Republican.
"The leader repeated to Secretary Yellen what he has said publicly since July," the spokesperson said. "They will have to raise the debt ceiling on their own, and they have the tools to do it."
On Friday, The Associated Press reported that the administration had been reaching out to state and local government leaders to warn them about interruptions in federal funding that could result if the limit wasn't raised... (MORE - missing details)
https://www.voanews.com/a/us-debt-limit-...33421.html
EXCERPTS: Unless Congress votes to increase the amount of money the U.S. Treasury is allowed to borrow above its current debt of $28.5 trillion, the United States will default on its financial obligations sometime in the next several weeks, experts warn. Few experts consider that likely to happen, but if it did, it could trigger an economic catastrophe with effects far beyond America's shores.
[...] With that crisis looming, Democrats and Republicans in Washington are battling over who should take responsibility for the politically unpopular task of raising the cap on borrowing, commonly known as the debt limit. Republicans, led by Senate Minority Leader Mitch McConnell, have vowed that not a single one of them will vote to raise the limit.
For their part, Democrats say that much of the spending the increased debt would finance is the result of policies passed by a Republican-led Congress and signed by a Republican president, Donald Trump. Therefore, they argue, the GOP should participate in raising the limit.
'The strange thing about the current debate is that there is absolutely no disagreement between the parties about what should happen. In an interview with the [u]Louisville Courier-Journal[/u[ in his home state of Kentucky last week, McConnell was explicit, saying that "America must never default" and "the debt ceiling needs to be raised."
However, McConnell said, Republicans will not provide any votes to make that happen. What he is demanding the Democrats do is raise the debt limit unilaterally, using a process called "budget reconciliation," which would make it impossible for Senate Republicans to block a vote on the measure.
McConnell's stance has angered Democrats, who point out that enforcement of the debt ceiling was suspended three times during the four years of the Trump presidency, each time with Democratic support for allowing the debt to rise.
[...] Many in Washington believe the debt ceiling will be raised before the U.S. defaults, but they aren't sure of the mechanism. ... "We know what's going to happen, but we don't know how it's going to happen," said Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, a government spending watchdog. "At the end of the day, one way or another, politicians will raise or suspend the debt limit. The United States cannot and will not default on its obligations. And so somebody is going to budge. But the question is, who blinks first?"
[...] The Biden administration has been trying to increase the political pressure on McConnell and congressional Republicans to force them to participate in a debt limit increase.
On Wednesday, Yellen spoke with McConnell on the phone. The White House said the purpose of the call was to "convey what the enormous dangers of default would be." But a spokesperson for McConnell made it clear that the conversation had not moved the Republican.
"The leader repeated to Secretary Yellen what he has said publicly since July," the spokesperson said. "They will have to raise the debt ceiling on their own, and they have the tools to do it."
On Friday, The Associated Press reported that the administration had been reaching out to state and local government leaders to warn them about interruptions in federal funding that could result if the limit wasn't raised... (MORE - missing details)