Refusing to negotiate can be a dangerous proposition, but the White House believes raising the debt ceiling shouldn’t be a matter of negotiation, especially if it would result in changes to Medicare and Social Security.
Specifically, the Reds (the color that denotes the Republican Party) are demanding massive cuts in social spending as a condition of reaching a meeting place, a position the Executive Villa rejects and draws criticism from opponents because Biden is not acting in the public interest .
However, the Blues (Democratic Party) are confident they will have much more leverage if they don’t negotiate, as The Hill newspaper recalled that there have been numerous clean debt ceiling increases of late, even when Donald Trump was President ( 2017-2021) and Republicans controlled Congress.
On Capitol Hill, they have voted to raise the debt limit more than a dozen times in the past 25 years, including three times during the Trump administration.
After Biden took office in January 2021, Senate Republicans were initially reluctant to support a clean hike in the debt ceiling, though they later agreed to a one-time exemption from a Congressional motion to raise it.
The United States hit peak debt of $31.4 trillion (millions) this Thursday, and the Reds are edging out of their dominant position in the House of Representatives.
The president of that legislature, Kevin McCarthy, said last Tuesday that negotiations on the possible budget cuts his formation is seeking should begin immediately.
However, the Biden administration warned that such a demand would be comparable to taking the US economy hostage.
For now, to avoid defaults, the Treasury Department announced the application of extraordinary measures that will affect internal services and federal officials’ retirement and savings funds.
In the event of a default (that the country does not have ready cash, i.e. cash, to pay off its debts), a financial panic would ensue with catastrophic consequences such as the loss of millions of jobs and a deep recession with damaging global repercussions.
Americans need to be prepared for the next show: the debt ceiling promises drama, suspense, uncertainty right up to the end if last-minute deals are made.
mgt/dfm