On the next Charlotte Talks ...
This weekend, President Biden and House Speaker Kevin McCarthy reached an agreement in principle to lift the debt ceiling. Biden said on Sunday that the deal would avoid “the worst possible crisis: a default for the first time in our nation's history, an economic recession, retirement accounts devastated, millions of jobs lost," but the bill also includes new work requirements for some recipients of government aid, including food stamps.
The U.S. has never breached the debt ceiling before, but experts believe there would be major consequences for Americans if it is. Some examples include delayed Social Security payments, veterans who may not be able to access benefits, and federal employees who might not receive their paychecks, according to NPR. It could also downgrade the U.S. credit rating, making it more expensive for the federal government to borrow money and hiking up interest rates for Americans borrowing money buying cars and homes, noted NBC News.
This isn’t the first time the country has nearly defaulted on its debt – in 2011 the country was at a similar crossroads. Still, Democrats repeatedly agreed to raise the debt limit when Republicans held the White House, including twice during the Trump administration and three times during the George W. Bush administration.
Congress still needs to approve President Biden's and House Speaker McCarthy's agreement in principle in the coming days. Treasury Secretary Janet Yellen’s latest projection is that the U.S. will run out of money to pay its bills by June 5th.
Still these fights are uniquely American – U.S. and Denmark are the only two Western countries with debt ceilings, but even Denmark’s doesn’t cause the same political chaos.
Even if the ceiling is lifted, will we still feel the impact of teetering close to the edge of default? And as deep divisions remain, are debt ceiling fights going to become an inevitable part of politics?
We sit down with local and national experts to learn how the debt ceiling negotiations may impact the pocketbooks and politics of North Carolinians.
GUESTS
Mark Vitner, chief economist at Piedmont Crescent Capital and former senior economist for Wells Fargo
John Connaughton, director of the UNC Charlotte Economic Forecast
Michael Bitzer, professor of politics and history at Catawba College