Members of U.S. Congress should not get paid unless the debt limit crisis has been raised, said Rep. Abigail Spanberger (D-Va.), as the Democratic end of the aisle remains resolute in their stance of non-compromise while GOP lawmakers are firm in their requirement for responsible fiscal spending.
“As we quickly approach a default, Congress is failing to protect seniors, servicemembers, Veterans, and all Americans who would be impacted by a default. As such, I request that you prepare to withhold U.S. Member of Congress pay until Congress has lifted the debt ceiling,” said Spanberger in her May 12 letter to the U.S. House’s Office of the Chief Administrative Officer (CAO) Catherine Szpindor.
“At this moment, hyper-partisanship in Congress is jeopardizing the economic strength and security of our country, the stability of global markets, and the world’s faith in the credit of the United States of America. And rather than fulfill our most basic obligations, U.S. House Republican leadership has instead championed a bad-faith proposal that has no chance of moving forward in the U.S. Senate.”
Spanberger said that the Treasury Department has employed “extraordinary measures” to prevent a default and that such an event would “trigger a loss of seven million jobs, push the unemployment rate over eight percent, eliminate approximately $10 trillion in household wealth, and reduce America’s real GDP by almost four percent,” citing Moody’s Analytics.
“Beyond these catastrophic economic impacts, seniors, servicemembers, and Veterans would be at risk of missing the benefits they’ve earned and that are critical for paying basic living expenses and affording healthcare,” she added.
The parties must find a resolution by figuring out a common ground. or the United States will default on its debts for the first time in history.
Since 2008, the United States has added $22 trillion in debt—$8 trillion of which has been accumulated since 2020. It had taken the country 230 years to add its first $8 trillion in debt.
At the end of 2021, lawmakers raised the debt limit by $2.5 trillion to a total of $31.4 trillion, and according to the budget office, that ceiling was reached on Jan. 19, 2023.
Party Stances
At the latest, May 9, debt ceiling talks, the parties found themselves at an impasse without any progress towards raising the debt ceiling.“Everybody in this meeting reiterated the positions they were at,” the House Speaker told reporters outside the White House. “I didn’t see any new movement.
“The president said the staff should get back together. But I was very clear with the president—we have now just two weeks to go [until potential default].”
Entering the meeting, McCarthy said in a tweet, “97 days ago, I met with President Biden to discuss how he can avoid defaulting on our national debt. For 97 days, he has ignored the crisis.”
He added, “House Republicans are the only ones in Washington who have passed a responsible debt limit increase that avoids default,” and that Democrats should “find common ground and act responsibly for future generations.”
But, the meeting was unsuccessful.
The White House blamed the GOP for holding the country “hostage,” and during a briefing on the day, WH press secretary Karine Jean-Pierre said that the issue was “not negotiable.”
“If House Republicans get their way, it could … trigger a recession, and we’ve listed over and over again what this could be if they continue to hold the American economy hostage,” Jean-Pierre said. “That’s going to be our focus, that’s going to be the president’s focus today—to make that clear to the leaders that they have to do their congressional duty.”
As for Senate Majority Leader, Chuck Schumer, he said, “To use the risk of default, with all the dangers that has for the American people, as a hostage, and say, ‘It’s my way or no way,’ … is dangerous.”
“So, we repeat our plea to Speaker McCarthy: Take default off the table, and let’s resume negotiations in the budget process and the appropriations process.”
Treasury Warning and Dissenting Voices
On May 1, Treasury Secretary Janet Yellen sent a letter (pdf) to McCarthy imploring him to raise the debt limit, failing which, the results would be severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”Yellen mentioned that the exact date of default would be “impossible to predict” but “after reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1.”
She added, “We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.”
“I think it’s a good time to remind everyone that seven of the last 10 times we’ve raised the debt ceiling, it’s had something attached to it, almost always related to spending, not surprisingly. So, the notion that this is unheard of is nonsense,” said Senate Minority Leader Mitch McConnell (R-Ky.) during a May 10 press conference.
McConnell reiterated that the United States will not default on its obligations. However, Schumer is not too enthusiastic.
“Speaker McCarthy doubled down on his efforts, and rather than take default off the table, he’s going to take it hostage at the hands of a far-right agenda that the American people would abhor,” Schumer asserted after his caucus’ weekly luncheon. “Avoiding default should not be contingent on passing the GOP’s hard-right, partisan agenda.”
A dissenting voice in the Democrat camp, Sen. Joe Manchin (D-W.Va.) said, in a CNN interview last week, that the Biden administration’s position is “hypocritical.”
“It’s not rational, it’s not reasonable, and it’s not practical,” he noted.
Manchin said that previous debt-ceiling increases without spending cut concessions have only taken place when one political party controls the White House and both houses of Congress.
“It’s hypocritical to say that we’re not going to do it now when we’ve done it every time that there has been a split in the party,” Manchin said.
