00:00 Economists are warning that the US is on the precipice of economic calamity if the government
00:04 can't come together and raise the federal debt limit.
00:06 Now, this isn't the first time the US has been in this situation.
00:10 We've been here before and the debt limit crisis has always been resolved by Congress.
00:14 But this year's fight is turning out to be a lot more messy than previous years.
00:18 And since this debt ceiling is one of the few must pass pieces of legislation, both
00:23 parties have tried to use this issue as an opportunity to take a political stand and
00:27 exact concessions to cut back on government spending.
00:30 It would cause the government to default on its legal obligations for the first time in
00:35 history, creating a financial crisis and threatening jobs for everyday Americans.
00:41 It could even potentially put the US at risk of a recession.
00:47 The only other country that has a debt ceiling is Denmark.
00:50 The debt limit or the debt ceiling is a cap on the total amount of money that the federal
00:55 government is authorized to borrow to fulfill its financial obligations.
00:59 Everything that the government spends money on from military to social security and veterans
01:04 benefits has to be funded either through tax revenue or debt.
01:08 And for the last two decades, the US has been running a budget deficit, adding $25 trillion
01:14 in debt.
01:15 So the Treasury Department now says that the government could be unable to issue new debt
01:19 and pay its bills as early as June 1st.
01:21 But Congress has always acted when called upon to raise the debt limit.
01:25 Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend,
01:31 or revise the debt limit.
01:33 The debt ceiling has become an increasingly political issue in recent years, especially
01:37 when power in Washington is divided as it is right now.
01:41 Republicans control the House and Democrats control the presidency and the Senate.
01:45 Democrats have been very united on this front.
01:47 They have insisted from the beginning that they won't accept any concessions attached
01:51 to a deal and continue to blame Republicans for taking the country's credit hostage.
01:56 Speaker McCarthy and I have had several productive conversations and our staffs continue to meet
02:01 as we speak as a matter of fact, and they're making progress.
02:05 I've made clear time and again that falling on our national debt is not an option.
02:09 But that no-negotiation strategy may be impractical with the June 1st deadline approaching in
02:14 less than two weeks.
02:15 There's a number of places that we are still far apart.
02:18 I mean, it didn't seem like it'd be this hard.
02:20 The economy plays a pivotal role in how Americans cast their ballots, so the outcome of these
02:25 debt limit discussions could shape what happens in 2024, particularly if Biden is unable to
02:31 raise the debt limit before defaulting or if he accepts concessions that undo his legislative
02:36 accomplishments.
02:37 For instance, progressives might see him as weak if he accepts the GOP's proposed work
02:41 requirements for federal aid.
02:43 This is a very big moment for Joe Biden, and as my colleague Phil Elliott wrote remarkably,
02:48 little of it is under his sole control.
02:50 [END]
02:52 [BLANK_AUDIO]
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