The Debt Ceiling?
If anything was a clear indication that Kevin McCarthy (House Speaker) lost a significant portion of his power, it was when the Freedom Caucus — far right Republican group within the House of Representatives — leveraged the debt ceiling against McCarthy to secure power within the House. A very small number of people hold a significant amount of power in the House that has never been seen before. What does this cost the taxpayers? The possibility of the debt ceiling not being raised and a U.S. economic disaster. Wow.
Let’s unpack this because it’s kind of heavy.
What is the debt ceiling? Well, it’s an arbitrary number created to limit the amount of money the U.S. can borrow to pay off its debts. Right now the limit is $31.4 trillion, and the U.S. hit that limit January 19, according to the Treasury Department. There are still ways for the U.S. to make good on their debts: prioritizing payments to bond holders; minting a trillion dollar coin; working with Congress to ensure a debt ceiling increase. The problem is that the Republican members that leveraged the debt ceiling against Kevin McCarthy do not want to see a debt ceiling increase without spending cuts. This would affect Social Security and Medicare, which is exactly where they want the cuts to be made.
Decreasing spending on Social Security and Medicare is wildly unpopular. Democratic and Republican taxpayers support Social Security and Medicare. At least 70% of Dems and Reps want an increase in Social Security support. The intentions of the Republicans holding these social safety nets hostage are very clear. They want power at the expense of the economy and people’s livelihoods. There is an avenue they cant take if they want to negotiate spending. That is when Congress makes its annual budget. Negotiate until you’re blue in the face.
The Treasure Secretary, Janet Yellen, predicts the Treasury has until June/July until it can no longer sustain paying debts without raising the ceiling. Until then, policymakers should be doing everything in their power to ensure a debt ceiling increase. I’m afraid of the consequences if they don’t. Not one month into his Speakership and McCarthy is next to powerless with a problem looming around the corner that requires a great deal of power among peers.