US Debt Ceiling: Bipartisan House Group Unveils Plan To Avoid Default

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Facts

  • The bipartisan House Problem Solvers Caucus, led by Reps. Brian Fitzpatrick (R-Pa.) and Josh Gottheimer (D-N.J.), on Wednesday released a one-page blueprint for raising the debt ceiling, providing an alternative to the GOP plan.1
  • Attempting to avoid a first-ever default on US debt if the House and Pres. Biden fail to strike a deal, the moderates are calling for the suspension of the debt ceiling through year-end to allow the budget and appropriations cycle to be completed.2
  • The draft framework would also establish an independent commission to recommend a package to stabilize the debt and deficit, adopt controls for the 2024 federal budget, and change the budget process to require annual reports and a presidential mid-year budget update.3
  • It's very unlikely, however, that this proposal could be enacted by June — when the US could face a default — without the consent of House Speaker Kevin McCarthy (R-Calif.), who is working to garner support to pass his own plan through the House next week.4
  • On Monday, McCarthy pledged to pass legislation to raise the nation's debt ceiling into the next year on the condition that public spending is frozen at last year's levels, among other concessions, which would most likely not pass in the Senate.5
  • Multiple reports emerged on Wednesday claiming that McCarthy proposed raising the debt ceiling by up to $1.5T in legislation whose details are yet to be revealed but likely include at least some spending cuts. The US national debt is currently around $31.7T.6

Sources: 1NBC, 2FOX News, 3Axios, 4Bloomberg, 5New York Times, and 6New York Post.

Narratives

  • Republican narrative, as provided by Townhall. While Republicans are sympathetic to Americans’ financial struggles, Biden continues to hide from the issue and refuse to negotiate. It’s time for the president to lead by coming to the table with McCarthy and for Democrats to acknowledge their reckless spending got the US into this predicament and must be reined in. Tying the debt ceiling to spending levels is the only way to make the country fiscally responsible.
  • Democratic narrative, as provided by AlterNet. Republicans are playing a dangerous game of roulette with the economy, and Americans are going to feel pain if they don’t relent. Speaker McCarthy is pushing an extreme wish list that increases costs for hard-working families without actually reducing the deficit. Spending cuts for the future won’t do anything to affect what the US has already spent, and claims to the contrary promote a delusion that will ultimately lead to a default.
  • Cynical narrative, as provided by ABC News. This government paralysis is just one of the many symptoms of a nation plagued by partisan games, with leaders more concerned with tearing each other down than building the country up. As both sides refuse to compromise, the US is creeping closer to the edge of an economic crisis — something must be done to end this deadlock.

Predictions