If the GOP fails to raise the debt ceiling, the US may be unable to pay some bills.
According to the Associated Press, Republican lawmakers’ unwillingness to extend the debt ceiling might leave the US unable to pay some bills, wreaking havoc on the economy.
The government has been borrowing money to cover its massive budget deficits, but that power ends on July 31. If the government is unable to renew a similar bill, a federal default could occur, which has never happened before.
According to analysts, a default would harm the economy by raising interest rates, decreasing the federal credit rating, and increasing the government’s borrowing expenses.
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After the chamber’s GOP leader declared his party will vote against lifting the federal debt ceiling, Senate Democrats accused Republicans of a “shameless, cynical” strategy that would harm the economy and the government’s credit rating.
Democrats reacted after Senate Minority Leader Mitch McConnell, R-Kentucky, indicated he believed all Republicans will vote against renewing Washington’s capacity to borrow money, in the latest chapter of a huge budget dispute that is expected to last far into October.
Senate Majority Leader Chuck Schumer, a Democrat from New York, said, “The leader’s pronouncements on the debt ceiling are sleazy, opportunistic, and utterly political.” “This debt is Trump debt, it’s COVID debt,” he stated, referring to former President Donald Trump’s large 2017 tax cut and federal spending that has exploded since the COVID-19 pandemic.
It’s not uncommon for the White House’s outgoing political party to threaten to oppose a debt ceiling rise in order to extract budget concessions.
The two parties are also at conflict over President Joe Biden’s multibillion-dollar ideas to boost federal domestic spending and pay for it by boosting taxes on the wealthiest and companies.
The debt ceiling, or the limit on federal borrowing, was suspended two years ago by Congress, but that suspension is set to expire on July 31.
Accounting tricks can be used by the Treasury Department to free up funds for a limited time, but it is unclear when that option will be exhausted. Some have speculated that the government may run out of money during the August recess, when Congress is due to be in session. The nonpartisan Congressional Budget Office predicted the crisis would occur in October or November on Wednesday.
This is a basic explanation of how to overcome a Senate Republican majority.