Why is the Debt Limit on the U.S. Important to Democracy? The Case Against Election Deniers and Other Legislators
Election deniers, however, remain a potent force on the right: More than 220 candidates who questioned the 2020 election have won state or federal office, and about 30 of those have said the election was stolen or rigged.
Any other law, even if it succeeds, still is words on paper. They need the support of those in positions of power who will act in theinterests of American democracy and the rule of law. Still, both the Senate and House bills are far better than what we have right now, and either one would go a long way to ensuring that the electoral-count law cannot be used as a tool for subverting the election in 2024 or beyond. Congress needs to approve the changes now, before anyone votes on the issue in 2024.
They should act before the end of the legislative session in order to ensure that the federal government can meet its debt obligations over the next two years; for investing in roads and high-speed internet, and for expanding the production of renewable energy. After months of negotiation, Congress agreed to those measures and Democrats must do everything they can to defend them.
Raising the limit was once routine but has become increasingly difficult over the past few decades, with Republicans using the cap as a cudgel to force spending reductions. If the limit is not raised, there is a risk of damage to the economy. Lifting the debt limit allows the United States to finance existing obligations, so there’s no new spending authorized. The government wouldn’t be able to pay all of its bills if the cap is not lifted.
It’s a serious threat: Republicans have engaged in similar brinkmanship repeatedly in recent years, most notably in 2011, when the possibility that the government might fail to meet its obligations produced a measurable increase in the interest rates the government must pay to borrow money, costing taxpayers an estimated $1.3 billion. Limits on federal spending made the recovery from the 2008 financial crisis even slower.
The federal government spends far more money than it gets in revenue, which leads to a budget deficit that is projected to be $1 trillion a year for the next decade. The debt increased to more than $32 trillion last year.
Why is there a limit on U.S. borrowing? Congress must authorize borrowing according to the Constitution. The debt limit was instituted in the early 20th century so that the Treasury would not need to ask for permission each time it had to issue debt to pay bills.
What would happen if the debt limit was hit? The United States would have a first-ever default on its debt if the limit was not raised. It would also force American officials to choose between continuing assistance like Social Security checks and paying interest on the country’s debt.
The four years of Donald J. Trump’s presidency were the exception to the debt-limit drama. Republicans largely abandoned their push to tie increases in the limit to cuts in federal spending when Donald J. Trump was president. Democrats passed a law to increase the cap after Republicans clashed with Mr. Biden as he was about to raise the limit.
The CEO of Bank of America told CNN he hopes the lawmakers can fix their issues so that the economy stays stable. Yet defaulting on the country’s debt remains a possibility that cannot be ignored.
Moynihan doesn’t like that idea. He told Harlow that “there’s got to be an argument about how we make sure we live within our means as a country” when asked whether or not the US should eliminate the debt ceiling.
The purse strings are held by Congress. He said he would be careful about restructuring the US Constitution. “I think we should leave it alone and make sure it operates correctly.”
He said that the US had to take on a lot of debt in order to overcome the drag on the economy caused by the Covid-19 crisis.
The economy recovered from the depths of the Covid downturn. So much so that inflation is now arguably the biggest problem facing the country, as well as the Federal Reserve.
Moynihan stated that Bank of America is still forecasting amild recession at some point in the future, though the start date keeps getting pushed. The good news is most people are still working, earning decent wages and spending time with their families.
Moynihan also didn’t seem overly concerned that any geopolitical tension between the US and China stemming from the recent spy balloon incident will have a lasting impact on the global economy.
Speaker Yellen: “We have no hope” for a Fed default on the debt ceiling, and he wants to return to the White House
Congress needs to raise the debt ceiling to prevent the U.S. government from running out of money in July and September.
The agency stated that the government could not meet its debt obligations until July if income tax receipts fail to meet expectations.
On Tuesday, Janet Yellen warned that a default on our debt would cause an economic and financial catastrophe.
Speaking to a National Association of Counties conference, Yellen said a federal default would cost jobs and boost the cost of mortgages and other loans. She said that it is unlikely that the federal government could issue payments to millions of American’s including veterans and senior citizens.
The US Treasury has been moving money around, temporarily, in order to prevent the government from going into default. The measures were expected to last until June, according to the Treasury.
After meeting with President Biden at the White House on Feb. 1, Republican House Speaker Kevin McCarthy said he hoped that he and the president could reconcile their differences “long before the deadline” to raise the ceiling. But McCarthy said he would not agree to a “clean” bill that would only raise the debt ceiling without spending cuts attached.