Political Battle Shaping Up in Washington Over Debt Ceiling

News Analysis  Even as Republicans and Democrats came together Tuesday to pass the Infrastructure Investment and Jobs Act, a political battle between the two is shaping up in Washington—this time over raising the debt ceiling. The debt ceiling, the federal government’s borrowing limit, can only be raised through congressional action. Should Congress fail to raise the borrowing limit, the U.S. government would face default, a move which Treasury Secretary Janet Yellen says should be “unthinkable.” Such a default, Yellen warned, “would have absolutely catastrophic economic consequences.” The deadline for averting a default is fast approaching—though the Treasury has resorted to “extraordinary measures” to continue to fund U.S. obligations, the federal government will run out of money entirely by October without the go-ahead from Congress to issue new bonds. Despite these risks, this dire threat has long been used by minority parties in the House to extract concessions from the opposition. …Read More

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