Congress at a Standstill: The Debt Ceiling Debate
As another fiscal year begins, House Democrats and Republicans are still at a stalemate in reaching a decision regarding the 12 appropriation bills currently on the floor. With Republicans proposing deep cuts to spending and Democrats pushing to ensure government services remain well-funded, tensions within Congress are high. This is creating uncertainty among Americans regarding the effectiveness of Congress in carrying out its duties, with only 32% of Americans trusting the legislative branch of Congress.
The United States Department of the Treasury defines the debt ceiling as “the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.” While this does add to the already overwhelming national debt that the United States has accrued, currently at over $33 trillion, raising the debt ceiling has been seen as a necessary procedure in order to fund government departments and programs in accordance with the demand for them and the rising cost for maintaining these endeavors. However, there will be detrimental effects when surpassing the ceiling occurs, and the United States has to default.
Raising the debt ceiling will inevitably add to the overwhelming debt that the United States has accrued. House Republicans grow weary of the growing national debt, only agreeing to raise the debt ceiling if Democrats agreed to federal spending cuts to departments, including food stamps, Medicaid, and other government assistance programs. Many far-right Republicans are displeased with the lack of budget cuts coming from this bill, many proposing more cuts and refusing support for the current bill. On the other side of the aisle, Democratic House members are in strong opposition to the proposed budget cuts. Representative Rosa DeLauro (D) of Connecticut expresses concern over the billions of dollars being cut from education, labor, and health and human services. She, along with many other House members, expressed concerns about a government shutdown, stating, “This moves us in the direction of, you could say a [continuing resolution], but in October, we’re looking toward a shutdown.” While Republicans and Democrats in both Chambers of Congress can not agree on a compromised bill that satisfies members of other parties, they agree that a government shutdown must be avoided at all costs.
To beat the fast-approaching deadline for passing all 12 appropriations bills, President Biden signed a “stopgap funding measure” that would keep the government open for 45 days, giving Congress more time to reach a concession on the pending spending bills. While this measure gives Congress more time to sign the 12 impending appropriations bills into law, it is essential that these bills are completed within the new time frame in order to avoid a government shutdown.
Consequences of a Government Shutdown
On a large scale, GDP is expected to decrease by a dramatic amount as a result of a government shutdown. During the last shutdown in 2018 to the beginning of 2019, U.S. GDP decreased by 0.2%, which amounted to $8 billion. According to the Bipartisan Policy Center, this potential shutdown has a GDP cost estimate of about $1 billion per week. The decrease in GDP will lead to a host of economic issues, such as a rise in unemployment, a decrease in firm revenue, and even economic recession.
More directly, a government shutdown will halt or hinder US government functions that provide essential services to people living in the United States. Monetary services like Social Security payments, federal employee and military payments, and other employee payments will be suspended until the shutdown ends. During the 2018-2019 government shutdown, 420,000 federal employees had their pay suspended while working through the shutdown, and an additional 380,000 were suspended altogether. Government shutdown would also hinder government services such as disaster recovery, COVID-19 and other disease response, and homeland security. Many people will also encounter interruptions in services like Medicare or applications for federal loans.
A government shutdown is not a foreign concept to the American public. In fact, many Americans worry daily about government shutdowns and their impacts on the services they receive. Before the 2013 government shutdown, the New York Times did a poll where 60% of Americans reported they were “closely watching the news” as there were talks of a government shutdown, and with good reason. The consequences of a government shutdown can be detrimental to federal employees and the American people as a whole.
Leaders are urging that the appropriations bills be passed as soon as possible. On September 30, former House Speaker Kevin McCarthy spoke to reporters in a briefing regarding the recent appropriations bills, stating that the House has passed 70% of its discretionary spending bills while the Senate has yet to pass a single bill. He, along with many other members of Congress and President Biden, share the concern about the consequences a government shutdown would cause if these appropriations bills are not passed in a timely manner.