WASHINGTON — The nation reached its debt limit Thursday, beginning the uncertain process known as extraordinary measures, in which the U.S. Treasury Department uses accounting maneuvers to avoid defaulting on the debt.
The often-used practice is intended to give the Republican House, Democratic Senate and Biden administration time to negotiate a bipartisan agreement to raise the debt ceiling to a dollar figure or suspend it through a certain date.
This year’s debate over how exactly to do that is expected to be especially tense after Speaker Kevin McCarthy, a California Republican, made promises to several of his party’s more conservative members in exchange for the votes needed for him to hold the gavel.
Democrats and the White House are adamant they won’t agree to drastic spending cuts to discretionary programs, which fund the vast majority of federal agencies, or mandatory programs like Social Security, Medicare and Medicaid.
The stalemate could have significant impacts on the global economy, financial markets and the nation’s credit rating the longer it goes.
If disagreements about how to address the debt limit last too long, the Treasury Department will exhaust extraordinary measures and the nation would default on the debt for the first time.
Manchin gets involved
White House Press Secretary Karine Jean-Pierre said Wednesday during the daily briefing that the Biden administration is “just not going to negotiate” on the debt ceiling, especially since Republicans voted three times to suspend it during the Trump administration. Read more