US at Risk of Debt Ceiling Standoff
The U.S. is in danger of reaching its $31.4 trillion debt limit sometime in 2023 if Republicans and Democrats can't agree to raise the limit. It was last raised in 2021.
House Republicans are expected to use the vote to try and get the Biden administration to curb spending in exchange for support of a debt ceiling increase, per The Hill. "While the U.S. has never defaulted on its obligations, it is a scenario that economists say could result in economic turmoil," the article reads. "But the standoffs alone have triggered nervousness on Wall Street and in the business community."
This bargain forced on President Biden is a "form of high-stakes brinkmanship that could push the United States to default on its debt and posing major new dilemmas for the White House next year," according to The Washington Post.
There have been various showdowns over the debt ceiling in the past, some of which have led to government shutdowns. "During a debt ceiling standoff in 2011, credit rating agency S&P downgraded its rating for the U.S. for the first time," The Hill article reads.
The conflict in these cases is between the White House and Congress, and the debt ceiling is typically used as leverage to push budgetary agendas.
In separate interviews this month, Republican Reps. Kevin McCarthy (Calif.), Jim Banks (Ind.), Adrian Smith (Neb.) and Jason T. Smith (Mo.) said they plan to demand various changes to federal law once the debt ceiling has been lifted, per The Washington Post.