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      The debt ceiling fight was never about debt. It was about Republican power | Mark Weisbrot

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      The debt ceiling drama seems to be nearing its end, as the US House of Representatives passed legislation that would lift the debt ceiling in accordance with a deal reached last weekend between Joe Biden, the president, and Kevin McCarthy, the Republican speaker of the House. The Republicans have been fighting to force cuts in spending and/or eligibility for food stamps (Snap), Medicaid, childcare and pre-schools, education and grants for higher education.By linking these and other provisions to the lifting of the debt ceiling, the Republicans tried to use the threat of default on the public debt to force Democrats to accept them. The legislation, which now goes to the Senate where it is expected to pass, did not satisfy most of their desires.The worst abuse that Republicans managed to include will be suffered by the hundreds of thousands of poor people who will likely lose access to food assistance under the Snap program. Many are in poor health and will not be able to complete the work requirements that Republicans have insisted on imposing for people of age 50-54; others will lose benefits due to additional red tape.There was also damage done by the fictitious narrative that Republicans were able to successfully promote about the “ticking time bomb” of the public debt. There is no bomb and if there were, it would not be ticking.The relevant measure of our debt burden is how much we pay annually in net interest on the debt, as a share of our national income (or roughly, GDP). That number was 1.9% for 2022. That is not big, by any comparison. We averaged about 3% in the 1990s, while experiencing America’s then longest-running economic expansion.The constant repetition of the “threat” posed by our national debt was a big win for Republicans, who are always looking to cut spending on social needs and safety nets; and more strategically important, to cut spending that could aid recovery from an economic downturn when Democrats are in power.In the Great Recession (December 2007 to June 2009), Republicans fought against measures to stimulate an economic recovery, which were already too small as proposed by Democrats. By October 2010, unemployment was still at 9.4%. In the election a month later, Republicans gained 63 seats to take the House and six Senate seats.The debt ceiling was used to threaten the Biden administration with a default on the public debt if they did not agree to Republican demands, mostly for spending cuts. The ceiling itself doesn’t affect new spending; it’s just holding up a chunk of the spending that our government is already obligated by law to carry out. In a democracy, this type of extortion should not be permitted.But Republican power isn’t based on democracy; on the contrary, it’s become highly dependent on institutions and practices that most people, including experts, would consider undemocratic or anti-democratic. Republicans benefit enormously from the fact that 80% of senators are elected by about 50% of voters. And if that’s not slanted enough, there is the filibuster, which effectively requires a 60-vote majority to win almost any pro-democracy reforms. This includes changes that are needed even for the Senate as presently constituted: eg representation for Washington DC, which has more population than a couple of states. We are the only democracy in the world where people who live in our national capital city don’t have full voting rights.Then there is voter suppression and gerrymandering, for both state and federal elections. These two methods of influencing election outcomes have gone hand-in-hand. Of course swing states are prime targets: recall that Republican presidents who ruled for 12 of the past 22 years came to power while losing the popular vote.When Republicans win, they then use their power to stack the cards further in their favor. This includes packing the judiciary, where Republican judges advance their agenda.Their decades-long struggle to control the judiciary reached its pinnacle with a 6-3 majority of the US supreme court, with five justices appointed by presidents who lost the popular vote.The current Republican majority now “substitutes a rule by judges for the rule of law”, the dissenting justices wrote when that majority revoked the right to abortion last year.Dozens of senators have described the supreme court as “captured” by “dark money” from Republican donors, including “rightwing billionaires”, and it is currently facing lost credibility as well as accusations of corruption.If the Republicans had gotten all that they had included in their legislation to lift the debt limit, it would have reduced the public debt by less than one half of 1% next year.This makes it even clearer that the debt ceiling fight was never really about debt reduction. It’s part of a vicious cycle in which political power is abused in order to consolidate a system that is increasingly undemocratic; and then further abused. The debt ceiling is just one part of that cycle, and should not have been negotiated; it needs to be abolished.
      Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington DC and the author of Failed: What the “Experts” Got Wrong About the Global Economy More

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      Debt ceiling bill: key takeaways from the vote

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      The US House of Representatives passed the much-debated debt ceiling bill on Wednesday evening, moving the country closer to avoiding a potentially catastrophic default. Next up in line is the Senate, the Democrat majority chamber, which would push the bill to Joe Biden’s desk.But the vote on Wednesday revealed the divided lines, not only between Republicans and Democrats, but within the parties. Here are some key takeaways from this vote on the Fiscal Responsibility Act:Kevin McCarthy’s party faced significant internal resistanceMore Democrats (165) than Republicans (149) supported the measure – something the right wing may use as evidence that the bill was a bad deal for their side. Indeed, the Republican opposition to the bill is much louder than that of progressive Democrats, who are concerned about the cuts to benefits programs and the impact on climate.Key Democratic programs and priorities will feel the effectsAn estimated 750,000 could lose food stamp benefits due to the new work requirements, according to the Center on Budget and Policy Priorities, a progressive thinktank. And in another blow to progressives, the bill gives special treatment to the Mountain Valley pipeline.A quarter of the $80bn of newly allotted funding to refurbish the IRS will also be cut from Biden’s key legislation, the Inflation Reduction ActBut it preserves health plans, Social Security and other programsThe bill will not impact Medicaid benefits, the main government health program for low income Americans, or social security, even though McCarthy tried to keep the debate open on such programs just hours ahead of Wednesday’s vote. Republicans attempted to cut these plans to curb government spending. However the bill will avoid more increases to the bloated US defense budget.And the agreement will fully fund medical care for veterans at the levels included in Biden’s proposed 2024 budget blueprint.Both Biden and McCarthy are counting this as a winWhile critics say the president could have avoided making multiple concessions, the president touted his ability to bring the deal together under heated circumstances, and the bipartisanship he has famously campaigned on.“This budget agreement is a bipartisan compromise,” the president said in a statement reacting to the news. “Neither side got everything it wanted. That’s the responsibility of governing. I want to thank speaker McCarthy and his team for negotiating in good faith, as well as leader Jeffries for his leadership. This agreement is good news for the American people and the American economy.”McCarthy, meanwhile, claimed the bill would herald the “largest savings in American history” during the floor debate, though this is not quite accurate.“I have been thinking about this day before my vote for speaker because I knew the debt ceiling was coming. And I wanted to make history. I wanted to do something no other Congress has done,” McCarthy told reporters after the vote. “Tonight, we all made history.”The Senate is already making moves to move the bill forwardChuck Schumer, the Senate majority leader has already put the debt limit bill on the Senate calendar to start the process on Thursday. There is likely to be some resistance there as well, as progressives such as Bernie Sanders have already signaled their concerns, but the bill is expected to pass. More

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      US House passes bill to raise debt ceiling just days before default

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      The House passed a bill to raise the debt ceiling on Wednesday, clearing a major legislative hurdle with just days left before the US is expected to default.The final House vote was 314 to 117, with 149 Republicans and 165 Democrats supporting the measure. In a potentially worrisome sign for the House Republican speaker, Kevin McCarthy, 71 members of his conference opposed the deal that he brokered with President Joe Biden.Taking a victory lap after the bill’s passage, McCarthy downplayed concerns over divisions within the House Republican conference and celebrated the policy concessions he secured in his negotiations with Biden.“I have been thinking about this day before my vote for speaker because I knew the debt ceiling was coming. And I wanted to make history. I wanted to do something no other Congress has done,” McCarthy told reporters after the vote. “Tonight, we all made history.”Biden applauded the House passage of the legislation, calling on the Senate to quickly take up the legislation to avoid a default. The treasury secretary, Janet Yellen, has warned that the federal government will be unable to pay its bills starting 5 June unless the debt ceiling is raised.“This budget agreement is a bipartisan compromise. Neither side got everything it wanted,” Biden said in a statement. “I have been clear that the only path forward is a bipartisan compromise that can earn the support of both parties. This agreement meets that test.”The debt ceiling bill passed by the House would raise the government’s borrowing limit until January 2025, ensuring the issue will not resurface before the next presidential election. As part of his negotiations with Biden, McCarthy successfully pushed for government spending cuts and changes to the work requirements for the Supplemental Nutrition Assistance Program.However, the concessions that McCarthy won fell far short for members of the freedom caucus, who had pushed for steeper spending cuts and much stricter work requirements for benefits programs. They belittled the debt ceiling compromise as a paltry effort to tackle the nation’s debt, which stands at more than $31tn.Representative Scott Perry of Pennsylvania, chair of the freedom caucus, said on Twitter before the vote, “President Biden is happily sending Americans over yet another fiscal cliff, with far too many swampy Republicans behind the wheel of a ‘deal’ that fails miserably to address the real reason for our debt crisis: SPENDING.”House freedom caucus members staged one last attempt to block the debt ceiling bill from advancing on Wednesday afternoon, when they opposed a procedural motion prior to the final vote. With 29 Republicans voting against the motion, McCarthy had to rely on Democratic assistance to advance the debt ceiling proposal. In the end, 52 Democrats voted for the motion, setting up the final vote and virtually ensuring the bill’s passage.The House Democratic leader, representative Hakeem Jeffries of New York, mocked McCarthy’s failure to unify his party, arguing the procedural vote proved the speaker has “lost control of the floor”.“It’s an extraordinary act that indicates just the nature of the extremism that is out of control on the other side of the aisle,” Jeffries said during the floor debate before the final vote. “Extreme Maga Republicans attempted to take control of the House floor. Democrats took it back for the American people.”skip past newsletter promotionafter newsletter promotionDespite his sharp criticism of McCarthy and his Republican colleagues, Jeffries and the majority of the House Democratic caucus supported the debt ceiling bill. Although they lamented the spending cuts included in the bill, those Democrats argued the crucial importance of avoiding a default outweighed their personal concerns about the legislation.“Our constitution makes perfectly clear the validity of the public debt of the United States shall not be questioned,” said California representative Nancy Pelosi, the former Democratic House speaker. “While I find this legislation objectionable, it will avert an unprecedented default, which would bring devastation to America’s families.”But dozens of progressive lawmakers opposed the bill, attacking the spending cuts and new work requirements procured by McCarthy as an affront to the voters who elected them.“Republicans never cared about reducing the deficit, only about forcing through their anti-working family policy priorities under the threat of a catastrophic default,” said Pramila Jayapal, chair of the Congressional Progressive Caucus. “The deal they passed tonight proves that point, and I could not be part of their extortion scheme.”Progressives in the Senate, including Senator Bernie Sanders, have echoed that criticism and indicated they plan to oppose the debt ceiling proposal, but the bill still appears likely to become law. The Senate Democratic majority leader, Senator Chuck Schumer of New York, has pledged to act swiftly to take up the bill once it has passed the House. The Senate Republican minority leader, Senator Mitch McConnell of Kentucky, has already indicated he plans to support the proposal as well.“Any needless delay, any last-minute brinksmanship at this point would be an unacceptable risk,” Schumer said in a floor speech Wednesday morning. “Moving quickly, working together to avoid default is the responsible and necessary thing to do.” More

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      Debt ceiling bill clears first House hurdle as 5 June deadline inches closer – live

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      From 3h agoThe House of Representatives has started its debate ahead of the chamber’s final vote on the debt ceiling bill.We will be bringing you all the latest details.Transport secretary Pete Buttigieg has weighed in on the debate surrounding the debt ceiling deal, saying that “no one’s going to get everything they want when you have a negotiation like this.”During an interview with NBC host Chuck Todd on Meet The Press, Todd asked Buttigieg what responsibility he believes Democrats have to pass the bill for president Joe Biden.Buttigieg replied:
      “Obviously, we all would have loved to see a clean bill that separated the budget conversation from the default conversation but also we’re in a moment of divided government where no one side, no one party is going to get everything that they want…
      No one’s going to get everything they want when you have a negotiation like this, but this is one that we believe in that we think is the right way forward that also allows us to move on to the next conversation, putting the terrible and unacceptable specter default behind us.”
      When asked whether Congress and the Biden administration are “mainstreaming” using debt ceiling as a budget negotiation tool, Buttigieg replied:
      “Obviously, we didn’t ask for this situation that some of the more extreme voices in the House GOP put this country into … most reasonable people could agree, the best way to handle the budget negotiations is through the regular order process that the law and the Constitution set out.”
      Donald Trump has promised to strip away birthright US citizenship if he gets elected into office again.In a video posted onto social media yesterday, Trump said if he becomes president, he will sign an executive order that will make sure children of undocumented migrants “will not receive automatic US citizenship.”He added that his order “will “choke off a major incentive for continued illegal immigration, deter more migrants from coming and encourage many of the aliens Joe Biden has unlawfully let into our country to go.”Trump’s reiteration of birthright removal comes 125 years after the supreme court settled the issue.During his first presidential run he condemned the right by inaccurately saying, “We’re the only country in the world where a person comes in and has a baby, and the baby is essentially a citizen of the United States … with all of those benefits. It’s ridiculous. It’s ridiculous. And it has to end,” as over 30 countries currently offer birthright citizenship.Martin Pengelly has more:The House is now in recess subject to the call of the chair.The House will reconvene again at 7:15pm for one hour of debate that will be evenly divided between Republicans and Democrats before voting on the bill.The special counsel investigating former president Donald Trump’s attempt to overturn the 2020 presidential election results is looking into Trump’s firing of a cybersecurity official whose office called the election “the most secure in American history,” according to the New York Times.Reuters reports:The US special counsel investigating Donald Trump’s attempt to overturn his 2020 election defeat is examining his firing of a cybersecurity official whose office said the vote was secure, the New York Times said.Jack Smith, who is also investigating Trump’s handling of classified documents, has subpoenaed former Trump White House staffers as well as Christopher Krebs, who oversaw the Cybersecurity and Infrastructure Security Agency (Cisa) under Trump, the Times said, citing unnamed sources.Trump fired Krebs in November 2020, days after Cisa issued a statement calling the 3 November election “the most secure in American history”, as the then-president made his unsupported accusations that the vote was rigged.Cisa, part of the Department of Homeland Security, works to protect US elections. Krebs told associates at the time he expected to be fired.Representatives for Smith declined to comment on the Times report. Representatives for Krebs and Trump could not be reached for comment.For more, click here:The debt ceiling bill has passed the first procedural hurdle in the House, with 52 Democrats bailing out the Republican lawmakers.In addition to 52 Democrats voting yes for the rule governing debate in the chamber, 189 Republicans voted yes. Voting no were 158 Democrats and 29 Republicans.One more hour of debate is left before the final voting round commences later tonight.Donald Trump was captured on tape acknowledging that he kept a classified Pentagon document regarding a potential attack on Iran, CNN reports.According to report, federal prosecutors obtained the recording which was made during a meeting in summer 2021 at Trump’s golf club in Bedminster, New Jersey.Sources familiar with the matter told CNN that Trump made comments that suggested that he would like to share the information but that he was aware of his post-presidency limitations surrounding classified records.The report also cited sources saying that the meeting attendees did not have security clearance. Attendees included two people working on the autobiography of Mark Meadows, Trump’s former chief of staff, in addition to former Trump aides including communications specialist Margo Martin.According to sources, the recording is an “important” piece of evidence in a potential case against Trump over his handling over classified documents following his presidency.Senate minority leader Mitch McConnell echoed similar sentiments alongside Senate majority leader Chuck Schumer, saying that he will support the debt ceiling bill once it reaches the Senate chamber.“House Republicans’ unity gave them the upper hand, they used it to secure a much needed step in the right direction. When this agreement reaches the Senate, I’ll be proud to support it without delay,” said McConnell.Texas governor Greg Abbott has declared John Scott as the state’s temporary attorney general following the state House’s vote to impeach Republican attorney general Ken Paxton.The decision to impeach Paxton comes as a result of years of allegations including corruption, bribery, unfitness for office and abuse of public trust.According to the Texas Tribune, investigators testified at the state House general investigating committee, saying that they believed Paxton wrongly used official funds and abused his authority to assist a friend and financial backer.In response to the impeachment, Paxton said it was an attempt to “overthrow the will of the people and disenfranchise the voters of our state” and that the charges are based on “hearsay and gossip, parroting long-disproven claims,” the Associated Press reports.Meanwhile, Abbott, who has largely been silent during the whole ordeal, said in a statement, “John Scott has the background and experience needed to step in as a short-term interim Attorney General during the time the Attorney General has been suspended from duty,” the Associated Press added.New York Republican representative Marcus Molinaro hailed the tentative bill, calling it “an agreement [that] will move this nation forward.”
      “The Fiscal Responsibility Act takes important action, not at all to punish our most vulnerable. In fact, it takes real steps to ensure those most vulnerable among us are protected and served and have access to the support that they deserve, and by the way, find their way to work.
      This bill hold states like New York and others accountable for waving restrictions, expanding access, not to help the most vulnerable, but to bloat and to grow and to increase state government. Because of action states have taken, the most vulnerable are left to fend for themselves…
      States like New York increased their infrastructure, their government and leveraged federal taxpayer dollars, not to benefit those who need the help the most but to benefit state government. And this bill starts a very important step of holding states accountable…
      We have an opportunity here to make a measurable difference in the lives of those who struggle the most. And this is an effort to ensure that that happens.”
      Texas Republican representative Chip Roy lashed out against Democrats over the tentative bill during the House debate, saying:
      “I don’t wanna hear a whole hell of a lot about what we’re doing to devastate American families with rampant inflation, because we keep spending money we don’t have.
      To my colleagues on this side of the aisle, my beef isn’t that I don’t understand the struggle with the negotiators against that kind of reasoning. My beef is that you cut a deal that shouldn’t have been cut…”
      The House of Representatives has started its debate ahead of the chamber’s final vote on the debt ceiling bill.We will be bringing you all the latest details. More

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      Alexandria Ocasio-Cortez says she will vote against US debt ceiling deal

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      The New York Democratic congresswoman Alexandria Ocasio-Cortez said she would vote against the debt limit deal on Wednesday night, as the 5 June deadline looms.On Tuesday, the Hill said the office of one of the most high-profile progressives in the US House confirmed she would not support the controversial agreement to raise the debt ceiling, which was agreed by Republicans under the speaker, Kevin McCarthy, and the Biden White House.Ocasio-Cortez, widely known as AOC, had previously signaled that she would not support the deal.“My red line has already been surpassed,” Ocasio-Cortez said last week. “I mean, where do we start? [No] clean debt ceiling. Work requirements. Cuts to programs. I would never – I would never – vote for that.”Several far-right Republicans have also opposed the deal, saying it does not go far enough to cut spending.Support from Democrats will probably be needed for the bill to pass the House on Wednesday night. But progressive support is split, as some lawmakers raise concerns about work requirements added to welfare programs.“Some number of progressives, including myself, lean no,” Greg Casar, the Progressive caucus whip and a Democrat from Texas, told Axios.The progressive caucus chair, Pramila Jayapal of Washington, said on a Tuesday press call the bill contained measures progressives were “seriously concerned about”.“There will be real harmful impacts for poor people and working people,” Jayapal said, noting that several members had “serious concerns about the environmental justice implications of this bill”.Other progressives emphasized the need to avoid a default.“You have to deal with reality in politics,” the Tennessee representative Steve Cohen, a progressive caucus member, told Axios, adding that concerns about the bill’s contents are “totally secondary to keeping the world’s economy … on track”.The compromise announced on Sunday would suspend debt-limit negotiations through 1 January 2025 and raise the US debt limit from $31.4tn.The deal includes changes to federal assistance programs, including new work requirements for food stamps access. Unspent Covid-19 aid will be returned to the government.Several Democrats have criticized Biden for negotiating with Republicans under threat of a default. More

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      What is the US debt ceiling and what would happen if it is not raised?

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      Joe Biden and the House Republican speaker, Kevin McCarthy, have reached a deal “in principle” to raise the federal government’s $31.4tn debt ceiling, potentially averting an economically destabilising default on 5 June.With any new agreement still required to pass through a divided Congress, the risk that the Treasury department runs short of money to cover all its obligations does however remain.Without raising the debt limit, the US government would default on its bills, a historic first that would likely carry catastrophic consequences. Federal workers would be furloughed, global stock markets would crash and the US economy would probably drop into a recession.As details of the deal begin to come to light, here is a quick guide on the debt ceiling and what it means for the US government and people across the country:What is the debt ceiling?The debt ceiling is the limit on the amount of money the US government can borrow to pay for services, such as social security, Medicare and the military.Each year, the government takes in revenue from taxes and other streams, such as customs duties, but ultimately spends more than it takes in. This leaves the government with a deficit, which has ranged from $400bn to $3tn each year over the last decade. The deficit left at the end of the year ultimately gets tacked on to the country’s total debt.To borrow money, the US treasury issues securities, like US government bonds, that it will eventually pay back with interest. Once the US government hits its debt limit, the treasury cannot issue more securities, essentially stopping a key flow of money into the federal government.Congress is in charge of setting the debt limit, which currently stands at $31.4tn. The debt ceiling has been raised 78 times since 1960, under both Democrat and Republican presidents. At times, the ceiling was briefly suspended and then reinstated at a higher limit, essentially a retroactive raising of the debt ceiling.What happens if the US defaults?The US has never defaulted on its payments before, so exactly what would happen is unclear. It’s not likely to be good.“Failure to meet the government’s obligation would cause irreparable harm to the US economy, the livelihoods of all Americans and global financial stability,” the US treasury secretary, Janet Yellen, said in a letter to Congress in January.Investors would lose faith in the US dollar, causing the economy to weaken quickly. Job cuts would be imminent, and the US federal government would not have the means to continue all its services. Mortgage rates would probably soar – tanking the housing market.Why is the US debt so high?The US debt grows when the government is spending more money or when its revenue is lower.Throughout its history, the US has had at least some amount of debt. But the debt really started to grow in the 80s, after Ronald Reagan’s huge tax cuts. Without as much tax revenue, the government needed to borrow more money to spend.During the 90s, the end of the cold war allowed the government to cut back on defense spending, and a booming economy led to higher tax revenues. But then, in the early 2000s, the dotcom bubble burst, leading to a recession. George W Bush cut taxes twice, in 2001 and 2003, and then the US military campaigns in Iraq and Afghanistan increased spending by as much as nearly $6tn over the course of the war.When the 2008 Great Recession started, the government had to bulk up spending to bail out banks and increase social services as the unemployment rate hit 10%.When the unemployment rate returned to its pre-recession levels, in 2017, a major tax cut was passed under Donald Trump. The debt rose by $7.8tn while he was in office.And then the Covid-19 pandemic hit. The US government passed a series of stimulus bills to offset the worst of the pandemic’s impacts that ultimately totaled $5tn.What are the main contributors to federal government spending?The biggest chunk of US government spending goes to mandatory programs, such as social security, Medicaid and Medicare, which comprise nearly half of the overall annual budget. Military spending takes up the biggest chunk of discretionary spending, taking up 12% of the budget. Other big-ticket items include spending on education, employment training and services and benefits for US veterans. More

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      US debt ceiling talks continue into weekend amid signs deal is close

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      Negotiations over America’s looming debt crisis pushed into Saturday amid signs that a deal between Joe Biden’s administration and Republicans was close to being struck even as the deadline for a potentially catastrophic US default was nudged by a few days.The Associated Press reported that work requirements for federal food aid recipients have emerged as a final sticking point in talks, even as Biden had said on Friday that a deal on raising the debt ceiling was “very close”.Biden’s optimism came after the deadline when the US government would run short of funds to pay all its bills was pushed back to 5 June, giving both sides more breathing room but also raising the prospects that talks – which had seemed almost at a deal on Friday evening – could now stretch into next week.On Saturday, Republican House speaker Kevin McCarthy told reporters that he was making “progress” in negotiations with Biden, saying: “We do not have a deal … We are not there yet. We did make progress, we worked well into early this morning and we’re back at it now,” according to Reuters.When asked if Congress is able to meet the 5 June deadline, McCarthy swiftly responded: “Yes,” the Hill reports.Asked if a deal could be announced on Saturday, he replied: “I don’t know about today”.Biden and McCarthy have seemed to be narrowing on a two-year budget-slashing deal that would also extend the US debt limit into 2025 past the next presidential election.Both sides have suggested one of the main holdups is a Republican effort to boost work requirements for recipients of food stamps and other federal aid programs, a longtime Republican goal that many Democrats have strenuously opposed.The White House spokesman Andrew Bates said Republican proposals on the issue were “cruel and senseless” and said Biden and Democrats would oppose them.But at the same time the Louisiana congressman Garret Graves, one of McCarthy’s negotiators, was blunt when asked if Republicans might relent, saying: “Hell no, not a chance.”Bates condemned House Republicans in a statement to Politico, accusing them of “threatening to trigger an unprecedented recession and cost the American people over 8 million jobs unless they can take food out of the mouths of hungry Americans.”Americans and the world have watched with growing fear and and anger as the negotiating brinkmanship that could throw the US economy into chaos has dragged on in yet another repeat of the regular political theater that always seems to surround the issue in Washington.Yet Biden was upbeat as he left for the Memorial Day weekend at Camp David, declaring: “It’s very close, and I’m optimistic.”In a blunt warning, the Treasury secretary, Janet Yellen, said on Friday that failure to act by the new date for default would “cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests”.Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.Any deal struck by the White House and Republican negotiators would need to be a political compromise, with support from both Democrats and Republicans needed to pass the divided US Congress.McCarthy has promised to give his Republican members 72 hours to go through any deal, pushing back a vote to at least Tuesday and possibly much later in the week, depending on when a deal can be announced.On Saturday, Axios revealed that independent senator Kyrsten Sinema has joined the negotiations, according to sources familiar with the matter.The outlet reported that as Sinema attempts to use her newfound independent position to help negotiators reach a compromise, some Democratic lawmakers are privately concerned that her involvement might limit key renewable energy proposals.Currently, Republicans are seeking to make modifications to the National Environmental Policy Act in order to remove legal restrictions for oil and gas companies. Meanwhile, Democrats have urged the Biden administration and Democratic congressional leaders to oppose any Nepa changes.Earlier this month, Arizona’s representative Raúl Grijalva, a ranking member of the House natural resources committee, sent a letter – along with 79 other Democrats – to Biden and Democratic leadership, urging them to oppose environmental rollbacks in any deal.Ultimately, focus would especially be on the reaction to rightwing Republicans in the House, especially those in the Freedom Caucus mostly aligned with former US president Donald Trump.“Raising the debt ceiling is not a ‘concession’ by Republicans – it’s their constitutional duty,” the New York Democratic representative Dan Goldman tweeted on Friday.“Republicans are extorting the American people by threatening to crater the economy to extract unreasonable demands they’d never be able to get in the ordinary appropriations process,” he added.Several credit-rating agencies have said they have put the US on review for a possible downgrade, which would push up borrowing costs and undercut its standing as the backbone of the global financial system.A similar 2011 standoff led Standard & Poor’s to downgrade its rating on US debt, hammering markets and sending the government’s borrowing costs higher. More

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      US lawmakers blame each other for debt ceiling standoff: ‘They are not negotiating’

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      Lawmakers exchanged sharp criticism about who was to blame for the protracted standoff over the debt ceiling on Wednesday.As the country nears its deadline to avoid a federal default, talks between Joe Biden and the House speaker, Kevin McCarthy, continued on Wednesday, as negotiators met again to hash out the details of a potential deal. But both parties simultaneously trade pointed remarks, underscoring that an agreement is not yet in reach.Congresswoman Pramila Jayapal, chair of the Congressional Progressive Caucus, pushed back against Republicans’ insistence on spending cuts. Jayapal said she spoke Tuesday to White House officials who informed her that Republican negotiators had already rejected $3tn worth of deficit-reduction proposals, such as ending tax subsidies for large oil companies and closing the carried-interest loophole.“It is not actually about debt or deficit,” Jayapal said at a press conference Wednesday afternoon. “It is about keeping the cash flowing to the wealthiest Americans and biggest corporations.”Accusing Biden of acquiescing to the “extreme” wing of his party, McCarthy reiterated that he would not support a “clean” bill raising the debt ceiling without cutting government spending. Rejecting the White House’s efforts to reduce the federal deficit by raising more tax revenue, McCarthy insisted that any agreement must focus on the spending side.“We have to spend less than we spent last year,” McCarthy said. “It’s not a revenue problem. It’s a spending problem.”Asked what concessions McCarthy was willing to offer Democrats to win their support on a potential bipartisan bill raising the debt ceiling, the speaker sidestepped the question.“I’m willing to make America stronger, to curb inflation, less dependency on China and spend less than we spent the year before,” McCarthy replied. “It’s not my responsibility to represent the socialist wing of the Democratic party.”Progressive lawmakers countered that Republicans were playing politics with the future of the US economy in the hopes of weakening Biden’s prospects in the 2024 election.“They are not negotiating,” said the progressive congresswoman Ilhan Omar of Minnesota. “They are looking to waste time, play games and make sure we default because they think that somehow that is going to be a political advantage that they will have in the coming elections.”The clashing perspectives demonstrated the challenges ahead in getting a debt ceiling bill through Congress. With some of the far-right members of the House Republican conference indicating they will not accept any compromise on the debt ceiling, McCarthy will likely need some Democratic votes to pass a bipartisan bill, and that task appeared daunting on Wednesday.“Democrats are not going to vote for a bill that screws poor people while protecting rich people and paving the way for another tax cut for billionaires,” said congressman Jim McGovern of Massachusetts, the top Democrat on the House rules committee.The White House, however, voiced optimism that a deal could still be struck, saying the talks remained “productive”.“If it keeps going in good faith, then we can get to an agreement here that is bipartisan and that will get out of the House and get out of the Senate,” said Karine Jean-Pierre, the White House press secretary.skip past newsletter promotionafter newsletter promotionThe clock is ticking for lawmakers to reach a solution and prevent a default that could reap devastating consequences on the American economy and global markets. The treasury secretary, Janet Yellen, reiterated in a letter sent to congressional leaders on Monday that the US government may be unable to pay its bills as early as 1 June.With just a week left before a potential default, surveys offer a mixed picture on the public’s response to the debt ceiling negotiations. According to a CNN poll, 60% of Americans believe the debt ceiling should only be raised if Congress simultaneously approves government spending cuts, while 24% want the borrowing limit to be hiked no matter what. But another NPR/PBS NewsHour/Marist survey showed 52% of Americans support Congress raising the debt ceiling and holding a separate discussion on potential spending cuts.For most Americans, the debt ceiling fight remains a distinctly Washington issue. The CNN survey found that 71% of Americans believe failure to address the debt ceiling would cause a crisis or major problems for the country, but only 35% said a default would damage their own finances.And yet, economists have warned that the ramifications of a federal default would be felt in every US household. Millions of jobs could be lost, and interest rates would probably climb, while those who rely on government funding would be deeply affected. A default would also probably trigger a severe tumble in the US stock market, reducing the value of tens of millions of Americans’ retirement accounts.Speaking at a Wall Street Journal forum on Wednesday, Yellen noted that markets are already seeing some volatility as the debt ceiling talks drag on, and she warned that the Biden administration will face “very tough choices” if the debt ceiling is not raised.“There will be some obligations we will be unable to pay,” Yellen said. She added, “We simply have to raise the debt ceiling.” More