Thread by @CardinalAndPine

🚨 Here’s what you need to know about what’s being called the “debt ceiling crisis."

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👉 The debt ceiling is a numerical limit, set by Congress, on how much money the federal government can borrow to pay its bills.

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Most years, the federal government spends more than it takes in in taxes, so it has to sell Treasury bonds to cover the difference and pay the country’s bills, up to the limit set by Congress.

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👉 When the government reaches that borrowing limit, Congress can either raise the debt ceiling or vote to suspend it for a specific period of time, allowing the Treasury Department to borrow as much as it needs.

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👉 Congress has raised the debt ceiling 78 times since 1960—including three times under former President Trump—because failing to raise the limit would cause the US to default on its debt, triggering a global financial crisis.

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👉 This is a crisis created by the Republican majority in #Congress which is threatening to blow up the economy unless the #Biden admin and Democratic-controlled Senate agree to dramatically cut $ on child care programs, Medicaid, food assistance, rental assistance, and more.

If Democrats refuse, Republicans have suggested they’ll let the US breach the debt ceiling.

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👉 Within a week of breaching the debt ceiling, the US would be unable to pay many of its bills and many programs that Americans rely on would be effectively paused. Interest rates would rise and stock markets would plunge.

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👉 An extended breach of the debt ceiling would eliminate more than 7 million jobs and eliminate $10 trillion in American household wealth, according to a report from Moody’s Analytics.

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👉 President Biden has called on Republicans to pass a “clean” debt ceiling increase with no spending cuts, as Democrats did three times during the Trump administration, but Republicans have refused.

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