Dems and GOP Differ on Debt Limit Priorities (Again)!
By DL White
“GOP Protecting the Rich & Well-Off
Here we go again! We have been here before. No deal yet in the Dept Limit debacle. The clock is ticking and time is rapidly running out…….Welcome to the latest version of the debt limit discussions………
Two political parties with two very different ideas on how to raise the debt limit that will allow the US Treasury to properly pay all government obligations by early June or default, which would be catastrophic.
If President Biden and Speaker of the House, Representative Kevin McCarty and those involved in the negotiations fail to reach a compromise, it will be the first time in US history that America has defaulted, to even delay, as May comes to an end could be dangerous…..
Any deal must pass both houses of Congress. The Democrats have a slight edge in the Senate 51-49 while the GOP holds the majority in the House 222-213.
Ironically, the issues of raising the debt limit becomes more pronounced during the administration of Democrats in the Oval Office and a Congress compromised of the GOP.
During President Obama’s first term in office, the issue came up (2011) and the GOP held the Country and process hostage to the very last minute. The failure to act in a timely manner resulted in a near financial tidal –wave. Stocks dropped, the foreign market dipped and interest rates bounced up and down.
Conversely, during the Trump administration, the debt ceiling was raised three (3) times. Three times without the bickering, posturing and bartering that is going on currently. It should also be noted, that it was Trump and the GOP that passed the Corporate Tax Reduction in (2017) which eliminated billions of dollars from the US economy………..
The Corporate Tax Reduction and the Jobs Act (which resulted in very little if any new jobs) impacted the economy and continues to impact. The President is proposing raising the Corporate Tax back to 28 percent, which in itself would bolster ($$$).
The GOP is totally against any tax increases, instead suggesting cuts to programs that provide food and healthcare for Americans with the greatest need.
Treasury Secretary Janet Yellen, addressing the matter shared in a letter to the House and Senate, “Failure to meet the government’s obligations would cause irreparable harm to the U.
Yellen continued, “In the past, even the threats that the U.S. government might fail to meet its obligations have caused real harms, including the only credit rating downgrade in the history of our nation in 2011, Yellen noted.
A report by Moody’s Analytics compared a default on the debt as creating a similar impact as the Great Recession, which was the worst economic downturn since the Great Depression (1930s).
Moody’s predicted in 2021 that the fallout would be so severe that investors would panic and pull their money from the stock market, causing stocks to drop by a massive 33% (Moody’s Analytics, 2021).
“Stock prices would be cut almost in one-third at the worst of the sell-off, wiping out $15 trillion in household wealth. Treasury yields, mortgage rates, and other consumer and corporate borrowing rates spike, at least until the debt limit is resolved and Treasury payments resume. Even then, rates never fall back to where they were previously,” Mark Zandi, Moody’s chief economist surmised.
“Plain and simple, the Republicans are looking out for big pharma, corporate America and themselves. How do you even consider cuts to programs that feed seniors or those that are in need, while supporting programs that protect big business? Noted Charles Franklin, a lifelong valley resident with an MBA from the University of Minnesota.
“If this country is not willing to protect the most vulnerable amongst us, what are we really about as a nation? Those cuts the Republicans are suggesting impact the least among us. That is their grandparents and family as well. It is not just people of color. It’s their families too,” said Franklin.
Two-sides and Two Very Different Opinions
House Minority Leader Hakeem Jeffries (D-NY) has openly accused Republicans of putting the country in a dangerous position over the debt limit showdown. In a recent interview, he warned of global economic castasophy.
“In our country’s history, which is about 247 years old, the United States of America has never defaulted on our debt. And if we were to do so, because of extremist Republicans in the House, that will have grave consequences for Social Security, for Medicare, for the economy and the, in fact, not just for the country but for the world,” Jeffries said.
Notable: Increasing or raising the Debt limit is not new; the first statutory debt limit set in the U.S. was 45 billion in 1939. The first debt limit came as part of the Second Liberty Bond Act of 1917. Lawmakers have raised the debt limit more than 100 times since it was enacted in order to prevent the United States from defaulting.
As always a timely contacting your Congressional Representative and encouraging action is always a good move!! The House (202)224-3121 or http://www.house.gov/find-your-representative. The Senate https://www.congress.gov