Republicans take the debt ceiling hostage.
If you’ve been wondering “What’s the debt ceiling? Why is it in the news? And what does it have to do with me?” — then this email is for you!
What is the ‘debt ceiling’?
- The debt ceiling refers to the limit on the national debt, or the maximum amount of money that the U.S. government is authorized to borrow to pay for federal programs. These programs include Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.1
Why is the debt ceiling in the news?
- This week, we hit the debt ceiling — meaning the federal government can’t borrow any more money. Right now, our bills are only getting paid because Secretary of the Treasury, Janet Yellen, is taking “extraordinary efforts” with the budget — such as suspending investments in government retirement funds — to pay what we owe. The Treasury will only be able to do this until some point this summer, at which time Congress must lift the debt ceiling or the nation will default on its debts.
What would happen if the debt ceiling isn’t raised?
- Defaulting on our debts would hurt our economy: up to 6 million jobs lost, even higher interest rates, an estimated surge in unemployment from 5% to 9%, and the likely triggering of a recession.2
So, why hasn't Congress raised the debt ceiling already?
Several Republicans have made it clear they will not support raising it. Arizona Rep. Andy Biggs recently tweeted, “We cannot raise the debt ceiling. Democrats have carelessly spent our taxpayer money and devalued our currency. They’ve made their bed, so they must lie in it.”3 In truth, roughly 12% of our current national debt was added in the first 3 years of the Trump administration. $1.8 trillion in debt was added from the 2017 Trump tax cuts alone, as corporate taxes were lowered from 35% to 21%.4
It appears House Republicans are hoping to force Biden and Democrats to approve cuts to Medicare, Social Security, and other vital federal programs, in exchange for lifting the debt ceiling.
Make no mistake: when the GOP takes the debt ceiling hostage, it is not about fiscal responsibility, but an agenda to impose their extremist views. We will keep you updated on how this develops.
In solidarity,
Team AOC
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1 - US Treasury
2 - Washington Post
3 - Bloomberg
4 - ProPublica
