House Republicans have likened the debt ceiling to a credit card limit and have vowed to put mechanisms in place. They play to arm-twist the White House into submission over spending limits. The White House has retorted by refusing to negotiate with the House Republicans over raising the debt limit of the US economy.
The request by the White House is normal as federal law stipulates the limits on the amount the government is allowed to borrow. But this once-normal act has been turned by lawmakers on both sides to indulge in high-voltage political bluster.
And now it is the turn of the House Republicans to indulge in some routine political brinkmanship. They plan to use their newfound House of Representatives majority to repeat it. The question arises: will the Republicans and the ruling Democrats finally work as one to allow the government to function normally and clear its bills?
The Obstinacy Of The House Republicans Could Result In The US Administration Defaulting
The consequence of defaulting on bills is immense and could happen if the House Republicans refuse to concede. As cash dries up, the lawmakers must agree together on increasing the credit limit set to enable the government to meet its legal compulsions, which include military salaries, tax refunds, Social Security benefits, and debt servicing. Yellen wrote to the new House Speaker, Republican Rep. Kevin McCarthy, and other GOP leaders.
The $31.4 T debt limit of the federal government is expected to be reached on Thursday. Once past that date, the Dept. of Treasury will be forced to go through extraordinary processes to stave off default.
Such extraordinary measures are also temporary and can last the US ONLY TILL June of this year. Once that is exhausted the federal government will be forced to borrow more or default on these payments. This will drastically affect the ratings of the government and will downgrade its ratings.