Chaos? Kumbaya? How the debt limit standoff might end

WASHINGTON — Just how does this debt limit standoff end?

Time is short: The Treasury Department warns the U.S. could default as soon as June 1 if there is no deal.The president wants to disarm the whole debate by having Republicans make a public commitment that the U.S. won’t default. He’d then be ready to discuss spending, taxes and other budget issues. It’s unclear how many GOP lawmakers share his definition of default. Some suggest a default would only apply to unpaid debt, while the administration wants to include the salaries of federal workers, repayments for contractors and aid to the poor, veterans, schools and others.

His debt limit bill would reverse discretionary spending to 2022 levels, then place a 1% cap on increases going forward. The bill also would reverse Biden’s forgiveness of student loan debt, his increased funding for the IRS and the tax incentives created in 2022 to encourage the adoption of clean energy. Those cuts would extend the debt limit through March 31, 2024, or up to an additional $1.5 trillion.

The question is what kind of an agreement could get through the House, the Senate and the Oval Office.There is the possibility that lawmakers could agree to a short-term extension, pushing the debt limit expiration to Sept. 30, when a federal budget also needs to be passed. “I don’t think the responsible thing to do is to kick the can down the road,” Jeffries said, even as he prioritized the importance of avoiding a default.Along with economists, Senate Budget Committee Chairman Sheldon Whitehouse, D-R.I., has indicated that a stiff market selloff could force Republicans to retreat. Their donors would holler about the pending financial losses and give every lawmaker an incentive to be the hero and rescue the jobs and retirement savings of millions of Americans.

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Chaos? Kumbaya? How the debt limit standoff might endJust how does this debt limit standoff end? Plenty of scenarios are being publicly and privately gamed out, but no one knows for sure. The possibilities range from kumbaya to total economic chaos with plenty of options in between. So far, neither President Joe Biden nor House Speaker Kevin McCarthy is giving ground ahead of talks slated for Tuesday. Time is short: The Treasury Department warns the U.S. could default as soon as June 1 if there is no deal. Potential outcomes include an extension of the deadline and Biden taking action on his own.
Source: AP - 🏆 728. / 51 Read more »

Chaos? Kumbaya? How the debt limit standoff might endJust how does this debt limit standoff end? Plenty of scenarios are being publicly and privately gamed out, but no one knows for sure. The possibilities range from kumbaya to economic chaos with plenty of possibilities in between.
Source: ksatnews - 🏆 442. / 53 Read more »