Congress is getting ready for another fight over the debt ceiling. On Monday, per CNBC, Senate Republicans blocked a bill, passed by the House last week, that would have suspended the debt ceiling for a year and prevented a government shutdown. Such a shutdown would begin Thursday, while a default would take place sometime in October if the debt ceiling is not raised by then.
All Republicans in the Senate voted no on the measure, as did Senate Democratic leader Chuck Schumer (D-NY), who did so in what CNBC described as a “procedural move” to enable him to reintroduce the measure later.
Per the report, Democrats must now “have to pull off a daunting series of maneuvers to avoid a sequence of events that could ravage the economy and cost millions of Americans their jobs,” possibly folding it into the ongoing reconciliation bill.
“The Republican Party has solidified itself as the party of default, and it will be the American people who pay the price,” Majority Leader Schumer said, per the report.
USA Today looked at whether it’s time to panic over a possible default this week.
“Lawmakers have raised the debt ceiling more than a dozen times in the past twenty years, and it'll be easier this go-round because one party–Democrats–controls the White House and Congress… yet this feels different.”
That report also looked at what happened in 2011, when the Obama Administration and Congress clashed over the debt ceiling.
“The brinkmanship had consequences: The stock market turned volatile, bond prices rose, and the rating agency Standard & Poor’s downgraded the U.S. AAA credit rating for the first time in history,” USA Today. “The Government Accountability Office estimated that ‘delays in raising the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011.’”
There were no such fights during the Trump Administration, either when the Republicans controlled both houses of Congress in the first two years, or after the Democrats captured the House in the 2018 elections.
Also Monday, two officials with the Federal Reserve warned of what could happen if the debt ceiling isn’t suspended or raised.
“If you actually crossed that line and got to a place where the government wasn’t paying off its obligations, I think it would create a very negative dynamic not only in the U.S. but around the world,” Williams said.
Meanwhile, Federal Reserve governor Lael Brainard said, also per the Financial Times, that “Congress knows what it needs to do . . . It needs to step up; it has responsibilities.”
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist, and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.