Government Shutdown Looms Amid Debt Ceiling Standoff “`

A disagreement over government funding, fueled by a debate about the debt ceiling, threatens a federal government shutdown in Washington.

The President-elect insists that legislation preventing a shutdown must include a provision to raise or suspend the debt limit, a measure his party typically opposes. He stated this demand is crucial to avoid betraying the nation.

Republicans initially complied, incorporating a two-year debt ceiling suspension into a revised spending bill. However, this bill failed a House vote, leaving the situation unresolved.

This explains the debt ceiling debate and its role in the government shutdown crisis:

What is the debt ceiling?

The debt ceiling, or debt limit, represents the maximum amount the U.S. government can borrow to fulfill its legal obligations. Congress must raise this limit to allow the Treasury Department to borrow beyond it.

The current federal debt is approximately $36 trillion. Post-pandemic inflation has increased government borrowing costs, resulting in debt service exceeding national security spending next year.

The debt limit was last addressed in June 2023, with a suspension until January 1, 2025. At that time, the limit will automatically adjust to match the amount of debt issued.

Recent debt limit votes have been used politically, leveraging this necessary bill to include additional priorities.

What is the debt ceiling fight all about?

The President-elect links the debt ceiling issue to the government funding dispute, asserting that both must be addressed concurrently.

He previously stated his desire for the debt ceiling issue’s resolution before assuming office.

He warned Republicans that failure to address the debt ceiling adequately would result in political consequences.

What happens if the debt ceiling isn’t raised?

Raising the debt limit isn’t immediately necessary. Upon the January 1st trigger date, the Treasury Department can employ “extraordinary measures” to prevent default.

These measures could potentially postpone a default until summer 2025—a scenario the President-elect aims to prevent to avoid a debt ceiling increase while he is in office.

Lawmakers have always acted to raise the debt ceiling due to the severe consequences of default. A default would be unprecedented and could have catastrophic effects on the economy and global markets.

Raising or suspending the debt limit doesn’t authorize new spending or tax cuts; it simply acknowledges existing budget laws and allows the government to meet obligations. This has led some to advocate for eliminating the debt limit entirely.

What could the debt ceiling fight mean for Speaker Mike Johnson?

The debt ceiling issue could significantly impact Speaker Johnson’s political standing as he seeks re-election.

The President-elect stated that Speaker Johnson’s continued leadership depends on decisive action to address the debt ceiling, creating a challenging situation just before the holidays.

The previous Speaker, Kevin McCarthy, worked with President Biden to raise the debt ceiling. Despite a bipartisan agreement, this deal was deemed insufficient by House Republicans, ultimately costing McCarthy his position.

Now, the President-elect wants Johnson to pass a debt ceiling extension before the potential government shutdown.

What are Democrats saying about the debt ceiling debate?

After a caucus meeting, Democratic Leader Hakeem Jeffries ruled out helping Republicans resolve the shutdown threat.

Jeffries stated on social media that Democrats wouldn’t help Republicans raise the debt ceiling if it results in cuts to social security.

Jeffries and other Democrats urge Republicans to uphold the spending agreement reached before the President-elect’s involvement. They have called the new GOP plan inadequate.

—Kinnard reported from Charleston, South Carolina.