WASHINGTON (AP) – The idea that the US government is going over its “debt limit” sounds scary. But what, exactly, are Washington lawmakers fighting against?
The debt limit is a nearly century-old artificial cap that Congress has placed on the US government’s borrowing capacity. Lawmakers have raised or suspended it nearly 80 times since 1960, but this time there is a deepening partisan standoff, underscoring how the debt limit has become a political weapon.
House Democrats voted on Tuesday to suspend the debt limit until the end of 2022. The proposal is expected to meet fierce resistance in the equally divided Senate, where Republican lawmakers say President Joe Biden and ruling Democrats should go it alone as they are also trying to move on to a multibillion-dollar package of tax increases on the rich and new spending on children, health care, infrastructure and the environment.
The Biden administration insists on bipartisanship on the issue.
“It is not a partisan issue to want to protect the full faith and credit of the United States,” White House press secretary Jen Psaki said on board Air Force One on Wednesday.
The issue is urgent because the extraordinary measures used by the Treasury Department to keep the government running would be exhausted by October. If Congress does not act, it creates the possibility of a default that could collapse financial markets and plunge the economy into recession. The bill passed by the House also ties the suspension to a measure that would continue to fund the federal government until December 3.