Adam Beam SUTV News
Photo courtesy of Wikimedia Commons
Update 5/28/2023 10:17 a.m.
On Saturday evening, President Joe Biden and House Speaker Kevin McCarthy reached an agreement in principle to raise the debt ceiling. This comes just as the date for the default was pushed back to June 5. While nothing is guaranteed, the House plans to decide on the decision Wednesday.
5/27/2023 10:53 a.m.
President Biden and Congress have been given an extension of four days (June 5) to raise the federal debt ceiling, that if not resolved could result in a catastrophic default.
In simple terms, the "X-date" would be the day that the US would no longer have the financial resources to pay off the extensive bills and debts the country owes. Despite the severity a day like that could pose to millions of Americans, the debate between party lines have been at semi-stalemate. The two figureheads at the center of this battle have been President Joe Biden and Republican House Speaker Kevin McCarthy.
President Biden is currently visiting Camp David this weekend, but he has sent a message of optimism for worried citizens. In a statement Friday, Biden told reporters, "There’s a negotiation going on. I’m hopeful we’ll know by tonight whether we’re going to be able to have a deal.” However, no decision was made on Friday.
Republicans have made many demands in order for them to support the raising the debt ceiling, demands they have indicated to have little wiggle room for negotiations. Republicans want an estimated $30 billion that was set aside for COVID-19 relief should be rescinded in order to create more savings. While demands such as this have seemingly been approved by the Biden White House, others have been the main cause for the extended debates.
Republicans are pushing for massive overhauls to the current eligibility standards for food stamps and Medicaid. This would raise the age for retirement from 50 to 55, for people enrolled in the Supplemental Nutrition Assistance Program (SNAP). The Medicaid decision would make it mandatory for abled-bodied adults with no children to work to have Medicaid services. Many House Democrats label these demands as nonstarter, or having no chance for succeeding.
As mentioned, many experts and analysts consider the possible breach of the debt ceiling to be a "catastrophic"event for the US and global economy. For starters the ripples alone could result in consumers lack of faith in the market leading to another recession. Economists of Goldman Sachs speculate that "one-tenth" of US economic activity would halt completely. It could also result in over three million jobs being loss and interest rates skyrocketing.
Currently, House Democrats are prepared to force a vote on the debt ceiling by "legislative discharge", but that would still require Republican support of at least 5 or more.
*This story is ongoing and will be updated as more details are released*