The country’s X-date — when the government is projected to run out of money to pay its debts — could come as early as June 1, according to Treasury Secretary Janet Yellen, while Goldman Sachs and Moody’s Analytics estimate that the ceiling could be hit around June 8.
President Joe Biden and House Speaker Kevin McCarthy are currently engaged in on again, off again negotiations over raising the nation’s debt ceiling mere days before the government could reach a “hard deadline” and run out of cash to pay its bills. Biden refused to come to the negotiating table for more than two months as McCarthy sought talks over a plan to raise the debt ceiling while addressing America’s out of control spending.
However, Biden’s bluff over negotiating was called over the issue of defaulting, which both parties always knew was not an option as even a short default could mean nearly a million Americans losing their jobs, and the country sliding into a mild recession, according to Moody’s Analytics. A breach would also hit Americans in their wallets: A Joint Economic Committee analysis previously found that failure to lift the debt ceiling could cost workers $20,000 in retirement savings.
What the Administration was not expecting was that Speaker McCarthy and the House GOP would have the leverage to successfully pass the Limit, Save, Grow Act to avoid a default by raising the debt limit without any conditions. But McCarthy did and Biden was forced to come to the table — where McCarthy is holding his ground, inspired no doubt by the memory of his fight in January for the Speaker’s gavel and his concessions to the GOP hold-outs.
Remember, McCarthy won the speakership with 216 votes, after flipping 15 hard-line Republican votes and after four representatives who refused to support him, changed their votes to “present” in the final round of voting—enabling him to win. These Members were Chip Roy, Matt Gaetz, Scott Perry, and Lauren Boebert.
Back in January, McCarthy’s concessions included an agreement to vote separately on the 12 different appropriation bills—from agriculture to defense spending to transportation—rather than allow them to be bundled together into an end-of-year omnibus spending bill. This was a key ask of far-right dissenters, after conservative House GOP members blasted the $1.65 trillion omnibus bill that passed the House last month, with Rep. Matt Gaetz (R-Fla.) saying the House rules should never allow a “horrendous omnibus bill to ever pass ever again.”
McCarthy also agreed to cap discretionary spending at the levels they were at the beginning of the Biden Administration for both defense and domestic spending, as part of a commitment to balance the federal budget within 10 years.
Several House Republicans, however, criticized the measure, which could reduce national defense spending by $75 billion, with Rep. Mike Waltz (R-Fla.), reportedly arguing it could back the government “into sequestration.”
McCarthy also agreed to reinstitute the Holman rule, a law that allows for the reduction in government officials’ salariesand any other compensation paid by the U.S. Treasury.
In one of his biggest concessions, and the one he’s thinking about right now McCarthy agreed to lower the number GOP conference members needed to start a process of removing the speaker, known as a “motion to vacate,” from five to one.
He promised to give House members 72 hours to review bills before they come to the floor, to require a vote to raise the federal debt limit and to hold votes on congressional term limits and a border security plan.
But the hard fact is that we’re heavily in debt because our spending is out of control. If $35 million could go to fund the Ukraine/Russia war this week, the crisis is not perceived as real by the Administration. McCarthy must force hard decisions from the White House and Congress.
House Rs passed a bill that makes responsible spending reforms & raises the debt limit. Biden & Schumer are well aware of the alarming numbers, yet their position remains the same: don’t change a thing. Is anyone else tired of the same old gamesmanship from D career pols? pic.twitter.com/Tk5sUbZ1tm— Citizens United (@Citizens_United) May 22, 2023