Republicans pushed through a debt ceiling bill April 26 by a slim margin, 217-215, to temporarily raise the limit by $1.5 trillion or until March 31, 2024, whichever comes first. McCarthy, a California Republican, has vowed that his party will not raise the nation’s borrowing cap without simultaneous budget reductions. Treasury Secretary Janet Yellen warned in a letter to lawmakers Monday that the country could meet its X-date, or default, as soon as June 1. If we don’t, we’re going to go into recession and our fiscal challenges will be made even worse.” “We need to end this drama as quickly as possible. So this is not the time to do it,” Zandi said. Both of those things need to happen, but we can’t do that in the current environment. “We need both additional tax revenue and we need spending restraint. House GOP debt limit bill would slash education The nonpartisan Congressional Budget Office, which is tasked with calculating costs and savings of federal legislation, projects a deficit of $1.4 trillion in 2023 and $2 trillion each year thereafter until 2033.īiden administration warns U.S. is on an “unsustainable” spending path, but they pressed lawmakers to disentangle long-term work on reducing the nation’s deficit from the immediate need to raise the debt limit. Zandi, and other witnesses, did not dispute that the U.S. That’s created tremendous pressure on the economy and of course on the banking system.” The (Federal) Reserve raised rates again yesterday, they’ve raised rates over 5 percentage points, all (in) over a year. The economy is struggling with the increase in interest rates. “I’d say a majority of economists, many CEOs and investors firmly believe that a recession is likely over the next 12 to 18 months. Recession risks are uncomfortably high,” Zandi warned lawmakers. “This is an especially inopportune time to have a political debate over the debt limit. Biden and House Speaker Kevin McCarthy last met about the debt ceiling in early February. On Monday, President Joe Biden called Senate and House leaders and scheduled a White House meeting for May 9. Senate Committee on the Budget Thursday and urged lawmakers to suspend the debt ceiling as soon as possible, and to ensure it is addressed long enough to make it to the other side of the 2024 presidential election.Ĭongress has eight working days with both chambers in session before Memorial Day, and negotiations appear non-existent. The risk assessment organization’s chief economist testified before the U.S. Treasury will likely default on the nation’s bills starting June 8, triggering major consequences for the economy, according to Mark Zandi of Moody’s Analytics. WASHINGTON - Unless Congress can strike a deal, the U.S.

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