Politics White House says not raising debt limit halt 'billions of dollars' for state, federal programs
Yellen triggers alarm bells over debt ceiling cliff
Treasury Secretary Janet Yellen is setting off alarm bells over a looming brawl over the nation's borrowing limit that could spark a global economic crisis if Congress fails to take action. Yellen's warning, delivered to congressional leaders on Wednesday that the country could default on its debt as soon as next month is casting new urgency on the behind-the-scenes discussions about how to raise the debt ceiling. No clear end game is in sight.Democrats could need 10 GOP votes to raise the debt ceiling if Republicans filibuster the measure. Democrats have only 50 votes in the Senate, and GOP leaders have indicated they will not help raise the borrowing limit.
WASHINGTON – The Biden Administration is warning state and local governments that funding for disaster relief efforts, Medicaid and education could be in jeopardy if Congress does not raise, according to a fact sheet released by the White House Friday.
“If Congress does not act before cash runs out, the U.S. will default for the first time in its history,” the fact sheet said.
Republicans on Capitol Hill oppose raising the debt limit. Senate Republican leader Mitch McConnell on Wednesday tweeted that it’s the Democrat’s “sole responsibility” to raise the debt limit. Congress is also in a crunch to put new spending in place for the next fiscal year, which begins Oct. 1, or there could be a government shutdown.
EXCLUSIVE: White House to go on offense against GOP on debt ceiling, Trump-era deficits
EXCLUSIVE: The White House is ending its hands-off approach to the ongoing debt ceiling standoff between Democratic and Republican leadership on Capitol Hill and is pressing Senate Minority Leader Mitch McConnell to stop "playing political games" with the economy.McConnell, despite pleas from House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer, said in April that Republicans would not vote to raise or suspend the debt ceiling and that Democrats must include the measure in budget reconciliation.
“With a Democratic President, a Democratic House, and a Democratic Senate, Democrats have every tool they need to raise the debt limit,” he tweeted. “It is their sole responsibility. Republicans will not facilitate another reckless, partisan taxing and spending spree.”
The debt ceiling is the total amount of money the U.S. is allowed to borrow at any given time, and covers all types of federal government debt, including spending on Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other expenditures.
Democrats aim for maximum pressure on GOP over debt ceiling
Senate Democrats are widely expected to package legislation to raise the nation's debt ceiling with a government funding measure, an effort aimed at putting maximum pressure on Republicans to support raising the borrowing limit or risk blame for a government shutdown.Republicans have insisted they will not provide the 10 votes needed to break a filibuster and raise the debt ceiling, a position that has infuriated Democrats who argue rising debt is the result of policies advocated by both parties.
During the Trump administration, the debt limit was suspended three times. Congress in August 2019 brokered a deal to suspend the debt limit for two years, after which the new limit would reset at the previous limit – $22 trillion along with any new spending in the intervening years. The limit was reinstated on Aug. 1 at around $28.5 trillion.
Treasury Secretary Janet Yellen has sent three letters to Congress warning them about the consequences for the financial markets if the debt ceiling isn’t raised or suspended.
'Prove you're a low-income student':
“A delay that calls into question the federal government’s ability to meet all its obligations would likely cause irreparable damage to the U.S. economy and global financial markets,” Yellen wrote in a letter to House Speaker Nancy Pelosi on Sept. 8.
Debt ceiling: Why we're talking about this again
Republicans and Democrats in Washington are gearing up for their occasional fight over raising the US debt limit. © Liu Jie/Xinhua/Getty Images Photo taken on Aug. 26, 2021 shows the Capitol building in Washington, D.C., the United States. Also known as the "debt ceiling," it's exactly what it sounds like -- the maximum that the federal government is allowed to borrow. Why is there a maximum? Because Congress set one more than a century ago to curtail government borrowing -- but instead of sticking to it has gone ahead and raised the limit every time it's been hit.
In the fact sheet to state and local governments, the White House outlined that multiple programs will be halted.
"If the U.S. defaults and can no longer pay its obligations, billions of dollars in state aid and state-run but federal funded programs could be halted," the fact sheet said.
The programs include:
- Disaster relief efforts
- Medicaid and the Children’s Health Insurance Program (CHIP)
- Infrastructure funding
- Public health
- Child nutrition, such as the national school lunch and breakfast programs, Women’s Infants and Children Program (WIC) and the Supplemental Nutrition Assistance Program (SNAP)
Contributing: Matthew Brown
Reach Rebecca Morin at Twitter @RebeccaMorin_
This article originally appeared on USA TODAY:
Opinion | How the Debt Ceiling Turned into a Doomsday Cult .
The end never actually comes but we love to obsess about it anyway.The United States is careening toward an urgent financial crisis starting in less than two weeks, as a political standoff on Capitol Hill threatens to shutter the government during a pandemic, delay hurricane aid to millions of Americans and thrust Washington to the precipice of defaulting on its debt.