The Looming Deadline: What Could Happen if the US Fails to Raise the Debt Ceiling by June 5th?
The United States is facing a looming deadline of June 5 to raise the debt ceiling, and failure to do so could lead to catastrophic consequences for the economy. If the debt ceiling is not raised, the U.S. government will not have the legal authority to pay for spending it has already committed to, such as Medicare and Social Security payments.[0] This would force the U.S. to default on its debt, leading to a stock market crash and millions of job losses.[0]
Some progressives have called for President Joe Biden to invoke the 14th Amendment, which states that “the validity of the public debt of the United States…shall not be questioned.”[1] However, such an action risks a constitutional crisis and swift legal action. The president has previously said he believes the federal government has the “authority” to do so, but that he does not consider invoking the 14th Amendment as an imminent solution.[2]
Meanwhile, Republican and White House negotiators are said to be moving closer to an agreement to raise the debt limit and cap federal spending for two years, with both sides predicting a deal could come together as soon as this weekend.[3] However, negotiations have been stalled for weeks as Republicans have demanded spending cuts and work requirements for recipients of government assistance in any bill that raises the debt limit, while Democrats have pushed for a “clean” bill with no conditions.[0]
House Speaker Kevin McCarthy faces challenges in negotiating a compromise deal that can pass both chambers while allowing him to keep his job. McCarthy's strategy of passing the GOP's debt-ceiling measure that helped force the president to the negotiating table in the first place may ironically make it more difficult for him to forge an acceptable compromise.[4]
At least 11 Senate Democrats are urging Biden to invoke his constitutional authority under the 14th Amendment to raise the nation's debt limit without having to go through Congress. Some Democrats fear that Biden's limited public statements on the debt ceiling amount to ceding the messaging war to Speaker McCarthy and his deputies, who have been ubiquitous in recent days in casting blame on the White House.[5]
Once a deal is reached, lawmakers expect it will take one or two days to turn it into full legislative text, and Republicans have pledged to wait 72 hours once that is finalized before any vote.[6] Both sides are dug in on whether to add work requirements for able-bodied adults without dependents who rely on federal assistance programs, such as food stamps and Medicaid, with Republicans also seeking to make changes to the Temporary Assistance for Needy Families program.[7]
0. “What’s The Deal With The Fight Over The Debt Ceiling?” FiveThirtyEight, 25 May. 2023, https://fivethirtyeight.com/videos/whats-the-deal-with-the-fight-over-the-debt-ceiling/
1. “What the 14th Amendment Really Says – WSJ” The Wall Street Journal, 21 May. 2023, https://www.wsj.com/articles/what-the-14th-amendment-really-says-debt-ceiling-biden-shut-down-default-constitution-78b24824
2. “Deputy Treasury secretary rules out possibility of using 14th Amendment to raise debt ceiling” CNN, 26 May. 2023, https://www.cnn.com/2023/05/26/politics/debt-ceiling-14th-amendment-treasury/index.html
3. “Emerging US Debt Deal Would Raise Limit, Cap Spending for Two Years” Yahoo Finance, 26 May. 2023, https://finance.yahoo.com/news/emerging-us-debt-deal-raise-005329446.html
4. “Kevin McCarthy's Hardest Job Will Be Selling a Debt-Limit Deal to Conservatives” Barron's, 25 May. 2023, https://www.barrons.com/articles/debt-ceiling-mccarthy-congress-compromise-79f609ce
5. “House Democratic angst grows as debt ceiling negotiations drag on” NBC News, 26 May. 2023, https://www.nbcnews.com/politics/joe-biden/house-democratic-angst-grows-debt-ceiling-negotiations-drag-rcna85865
6. “Negotiators aim for weekend deal to avert debt default” POLITICO, 26 May. 2023, https://www.politico.com/news/2023/05/26/debt-talks-default-deadline-00098978
7. “Biden and McCarthy have come to some agreements on spending, a source tells NPR” NPR, 26 May. 2023, https://www.npr.org/2023/05/26/1178407804/debt-ceiling-negotiations-deal-update-biden-mccarthy
