The problem is whether or not or to not improve the quantity that the US authorities can borrow towards itself earlier than a sure date when it runs out of cash. It’s all large numbers and misunderstandings: Increasing the debt ceiling is not actually about permitting the authorities to spend extra money going ahead. It’s about paying for the extra money the authorities has already spent.

Think of the debt limit like a bank card. What elevating the debt ceiling does is repay the issues you’ve already purchased. It does not permit you to go on a spending spree going ahead.

And but, Congress fights over it nearly each single time it comes up.

The newest battle options Senate Minority Leader Mitch McConnell insisting that no Republican senator will vote to extend the debt limit, a transfer that might power Democrats to maintain all 50 of their very own senators in line to move the improve on a purely partisan vote. McConnell desires to do that in order that, when Democrats search to push by their $3.5 trillion price range invoice someday quickly, Republicans on the marketing campaign path can say they voted unanimously to cease that type of out-of-control spending. (Again, value noting right here: Increasing the debt limit is about paying payments we have already incurred, not payments that we might incur going ahead.)

“They are just going to have to reconcile themselves and recognize they are going to have to own it,” said Texas Sen. John Cornyn, an in depth ally of McConnell.

Democrats — led by Senate Majority Leader Chuck Schumer — are doing the damndest to power Republicans into breaking with McConnell by, amongst different issues, contemplating packaging the debt ceiling improve with laws that might hold the authorities financed — and open — past the finish of the month. The considering there is that Republicans would not be keen to be a part of a authorities shutdown solely to keep away from elevating the debt limit.

Democrats additionally make the case that the present debt limit — round $28.5 trillion as of August — is the results of former President Donald Trump’s large tax cuts. “This is for Trump debt,” Sen. Dick Durbin told NCS. “You would think they would at least stand up and pay for the administration of that last Republican President.”
And here is the little secret about elevating the debt ceiling: Congress has by no means not finished it. Why? Because the penalties of not doing it are far too dire for the nation: The Treasury Department would default on its money owed, badly damaging the nation’s financial credibility round the world. In 2011, even the prospect that Congress wouldn’t elevate the debt ceiling — spolier alert: They did! — led Standard & Poor’s to downgrade its ratings on US debt for the first time in 7 decades.

This then is a decidedly dumb debate. Members of Congress are partaking in its regular brinksmanship over a) whether or not to pay payments they’ve already rung up and b) figuring out they are going to, finally, discover a technique to elevate the debt ceiling. Because they all the time do.



Sources