Congress Scrambles to Avoid Potential Debt Default
With the country facing the potential of an unprecedented default, Republicans in the House of Representatives have proposed spending cuts they would support in a debt limit deal. Led by Speaker Kevin McCarthy, the GOP majority in the House has said they were elected to push back against “wasteful Washington spending,” but Democrats insist the debt ceiling must be raised without conditions or negotiations.
The House Budget Committee, chaired by Rep. Jodey Arrington of Texas, released a list of proposed spending cuts, including rescinding President Joe Biden's proposed relief of student loan debt and ending the student-loan payment pause. In their press release, they declared that “We must ‘reverse the curse’ of deepening deficits and debt by addressing the underlying reason that we are having to raise the debt ceiling to begin with: uncontrolled federal spending.” Ending the student-loan payment pause would save $25 billion, and prohibiting Biden's broad plan to cancel student debt would save $379 billion.
Biden has continued to stress the danger of cutting Medicare and Social Security, saying during a Thursday speech that “I know that a lot of Republicans, their dream is to cut Social Security and Medicare.” McCarthy has said cuts to the two programs are “off the table.” Even with an aggressive approach, Congress might not be able to trim no more than $50 billion through cuts to discretionary programs from the current fiscal year – roughly 1% of overall federal spending.
The White House and Senate Democrats have calculated that McCarthy won't have enough votes to raise the national borrowing limit and will end up caving to their demands to avoid a first-ever debt default — with no strings attached or any conditions whatsoever. This move is a break from how one of his predecessors, John Boehner, dealt with the debt limit the last-time the country nearly defaulted – in 2011 when many of the decisions were made by the leadership, prompting a revolt among the rank-and-file.
With the national debt soaring over $30 trillion, Congress is looking for ways to avert a potential default. As the country waits to see if Republicans will be able to negotiate a deal with Democrats, the risk of a debt default looms ever larger.
0. “McCarthy trying to unify GOP factions for debt ceiling strategy: Report” Washington Examiner, 13 Feb. 2023, https://www.washingtonexaminer.com/news/mccarthy-trying-unify-gop-factions-debt-ceiling-strategy-report
1. “COLUMN: Why does GOP want to trim funding?” Tahlequah Daily Press, 9 Feb. 2023, https://www.tahlequahdailypress.com/opinion/columns/column-why-does-gop-want-to-trim-funding/article_b913b1a1-721f-5008-b0d1-88e2f8ec55f5.html
2. “GOP Targets Food Aid, Student Debt Relief, and More for Debt Ceiling Deal” Truthout, 9 Feb. 2023, https://truthout.org/articles/gop-targets-food-aid-student-debt-relief-and-more-for-debt-ceiling-deal/
3. “Will House Republicans ‘Reverse’ Student Loan Forgiveness And End Student Loan Pause?” Forbes, 10 Feb. 2023, https://www.forbes.com/sites/adamminsky/2023/02/10/will-house-republicans-reverse-student-loan-forgiveness-and-end-student-loan-pause/
4. “House Republicans just proposed ending the student-loan payment pause and ‘prohibiting' Biden's broad debt cancellation as part of 10 major budget cuts” Yahoo News, 9 Feb. 2023, https://news.yahoo.com/house-republicans-just-proposed-ending-200706529.html
5. “Protecting Social Security, Medicare leaves few options for GOP cuts” USA TODAY, 15 Feb. 2023, https://www.usatoday.com/story/news/politics/2023/02/15/republicans-debt-ceiling-social-security-spending-medicare/11258882002
6. “Kevin McCarthy leans on ‘five families' as House GOP plots debt-limit tactics” CNN, 13 Feb. 2023, https://www.cnn.com/2023/02/13/politics/kevin-mccarthy-debt-ceiling-strategy/index.html