President Biden’s proposed budget for the federal fiscal year beginning October 1 would spend $6.8 trillion of revenue from just $5 trillion in taxes collected. The imbalance, a $1.8 trillion deficit, would add to the $31.4 trillion national debt that has been accumulating since 1789. This is how it has always worked and the full faith and credit of the States United States allow Congress to borrow to keep the federal government running. .
The problem is that since January 19 of this year, the The US Treasury has been at the legal limit of the debt it can issue. The $31.4 trillion was capped 13 months earlier, on December 16, 2021, when the cap was raised by $2.5 trillion. Normally, Congress would agree to push for the maximum allowable borrowing, something it has always done since the debt ceiling was first implemented in 1917.
But this Congress, and we mean a far-right section of House Republicans under Speaker Kevin McCarthy, refuses to raise the ceiling unless they can get Biden and the Democrats to cut some of their favorite programs, a lawsuit naked politics thrown into a situation that should be above partisanship.
Although the ceiling has already been reached, the Treasury can do some maneuvering with spending for a few months, but by the summer those stagnant options will have been exhausted and the ceiling will have to be increased.
At the same time, there will be a fight over next year’s budget, since the Constitution requires that “All bills to raise revenue shall originate in the House of Representatives.” Social Security, Medicare, defense will be discussed, along with the Biden plans he laid out in his budget speech last week. That he introduced his budget in Philadelphia in the Electoral College battleground state of Pennsylvania means the 2024 presidential campaign is gearing up, with Biden preparing to take on Donald Trump and anyone who challenges Trump in the Republican Party.
What cannot be lost in the budget and campaign fight is the debt ceiling. McCarthy’s duty is clear. He must carry it out.