What’s the latest with the debt ceiling, Congress and the White House?
Wall Street and Main Street alike are starting to wake up to the looming threat of a debt ceiling default later this summer. No Labels has been sounding the alarm on this for a while, and we’re well aware of the stakes – recession, market turmoil, a serious blow to America’s standing, and much more.
When you see how severe the consequences of a default actually are, it becomes a lot scarier to realize that Washington still hasn’t acted to avoid this potential disaster. The threat is becoming more real by the day as credit markets are already starting to flash warning signs: The cost for an investor to buy insurance against a U.S. government default is now the highest it has been since the 2008 financial crisis.
It’s now been more than three months since Treasury Secretary Janet Yellen announced she was taking “extraordinary measures” to avoid a default. And it’s been nearly three months since President Joe Biden and House Speaker Kevin McCarthy (R-CA) – the two major players in resolving this crisis – had any sort of face-to-face meeting to discuss moving the ball forward.
Biden has held firm that he will not negotiate on the debt ceiling – he says he wants a clean increase, and nothing else, ignoring the ballooning government spending that’s nearly doubled our national debt since the last debt ceiling crisis 12 years ago and the inconvenient fact that as a Senator he once demanded spending cuts as a condition of his vote to raise the debt ceiling in the mid 1980s.
Meanwhile, far right members in the House of Representatives continue to push for a debt ceiling deal with spending cuts and policy demands Senate Democrats will never support which presents a significant problem: Democrats control the Senate and the White House, so what the far right wants has ZERO chance of becoming law.
So neither side has clean hands here. Both sides are posturing for political advantage.
You might see these theatrics and find yourself getting nervous. Will Congress get its act together? Will we default? Will our economy collapse?
It’s easy to give in to the doom and gloom. But let’s take a step back, breathe, and recognize something important:
This is all part of the process.
The fact is, not much in Washington worth doing gets done in one fell swoop. Progress on big issues, particularly when bipartisanship is necessary gets made in fits and starts, with plenty of setbacks and moments of crisis along the way.
Here’s the big picture, bottom line – after months of inaction from both sides, the rusty gears of dealmaking are starting to spin up. Speaker McCarthy brought his initial debt ceiling deal to the floor, and though it passed, the House will be forced to take this up again as the bill is widely suspected to be dead on arrival in the Senate.
As always, No Labels is working to play the essential role we have often played in previous bipartisan negotiations, educating Americans on the outlines of this problem and pushing our leaders together toward a bipartisan solution.
Our allies in the House Problem Solvers Caucus have unveiled a framework that puts us on the path towards a smart deal.
First, the Problem Solvers framework suspends the debt ceiling through the end of this year, buying time to start a plan to rein in our spending. The framework would then establish an independent commission to come up with a plan to stabilize America’s longer term debt and deficit problems, and require that Congress vote on that plan. The framework would also put new guardrails on the 2024 budget to stabilize the short-term deficit, and bring more order and transparency to the government spending process.
If all of these steps are followed before the end of this year, the debt ceiling will be raised through Feb. 28, 2025 — after the 2024 elections.
It’s the kind of plan that anyone who cares about fiscal responsibility – and the importance of America never defaulting on its debt – should be able to support, and we’re going to keep working with our allies in Congress to get it done.
But we need your help, too. The only way to keep the forward momentum going on this issue is for our leaders to meet and get down to brass tacks on the debt ceiling. That’s why we want you to sign this petition calling on Speaker McCarthy and President Biden to immediately start negotiating on a debt ceiling deal.
Let’s keep up the pressure and push our leaders to reach a commonsense solution for the good of the country.