In an age where everything’s an emergency, the debt ceiling fight certainly doesn’t feel like one. Feels like we have all the time in the world– and that may be a mixture of what party holds the Presidency and whether anyone actually believes the Treasury Secretary’s guestimate of when we’ll hit the borrowing limit.
Yellen told Congress on Monday that the U.S. may be unable to pay its bills as soon as June 1, moving up the previous July-September deadline identified by the Congressional Budget Office in January, while citing lower-than-expected April tax collections.
She couched the statement by adding the deadline to raise the debt ceiling or risk a default “could be a number of weeks later than these estimates.”
Republican senators are banking on a later date, Axios reported, noting an extended timeline would give the party more leeway to negotiate spending cut demands with Democrats in exchange for agreeing to raise the federal government’s borrowing limit.GOP Senators Say ‘Nobody Believes’ Yellen’s June 1 Debt Ceiling Deadline—Here’s Why They Might Be Right
I also think that it’s a function of the news cycle. Pres. Biden wants a clean debt ceiling bill. Speaker McCarthy passed a bill with cuts to spending. The two sides square off in negotiations this week. Many are starting to guess at how these talks could end.
The Treasury Secretary wants to put pressure on the House to get them to agree, but most people want a compromise, so the press is on the fence about which narrative to push– so we get time. And weird stories about minting a trillion dollar coin to deposit in the Fed to solve the problem… no joke.
The White House has several options at its disposal. For one thing, Biden could simply declare the debt limit unconstitutional under the 14th Amendment, which stipulates that “the validity of the public debt of the United States … shall not be questioned.” Some legal scholars therefore believe that it is not constitutional for Congress to prevent the federal government from paying its debts.
Alternatively, the Treasury Department could use its statutory authority to print platinum coins in any denomination to mint a $1 trillion coin and then use it to repurchase government debt held at the Federal Reserve.How Biden Can Win the Debt-Ceiling Fight With One Weird Trick
All anyone can seem to agree on is that, should we actually get close to the real debt ceiling, America will pay a steep price. Though this isn’t wouldn’t be the first time that America defaulted on her debt. This is part of the reason that Dave Ramsey has people cut up all their credit cards and only use cash. It’s so easy to use money you don’t have to pay for things, and even easier when you’re the world’s reserve currency!
The penalties in the past for waiting until the last minute to agree a deal – which include hits to the country’s credit score, and a loss of confidence with investors – would only be the start of the economic mess should these special measures come to an end before anything is agreed.America will pay a terrible price for Biden’s debt denial