ACTION ALERT:
Hitting the Debt Ceiling: What’s Next?

Indivisible

(January 19, 2023) — The US hit the debt ceiling today — the legal cap set by Congress on how much the treasury can borrow to cover checks Congress and the White House have already written.

Wait a minute, don’t panic. We are still in safe-ish territory.

Treasury Secretary Janet Yellen has laid out a plan to take “extraordinary measures” — a process where the treasury shifts around money to keep the government under the borrowing cap. This tactic will prevent the United States from defaulting on our financial obligations until somewhere around June — but the fight has already kicked off, and we can’t afford to wait until we’re up against the deadline.

This is a warning bell urging us to avoid disaster.

How Did We Get Here?
For a full explainer, check out our Legislative Process 101: The Debt Ceiling page. The short version is that the US runs a budget deficit and relies on treasury debt to fund itself.

Our country isn’t unique in this regard. It’s true of many of our peer nations. But while other countries either have no debt ceiling or have placed one so high as to be inconsequential, we have trapped ourselves in a pattern of needing to regularly lift our debt ceiling by only marginally increasing it every time.

The Danger
Historically, the debt ceiling was lifted as a matter of practical importance (the US has never defaulted on its debt). In more recent years, and increasingly since Obama’s presidency, Republicans have wielded the threat of a default in order to push extreme policy goals.

In the end, reason has always won out, and the debt ceiling has never been breached (though in 2011 we did get close enough that, for the first time ever, the S&P downgraded our credit rating causing wild market fluctuations endangering the entire global economy).

The difference this time is that Kevin McCarthy made backroom deals with the most extreme wing of his party — the House Freedom Caucus — in order to secure his position as Speaker. This significantly increased their influence in the House. The Freedom Caucus is more than happy to throw our country into chaos if it brings them more power (see: 15 rounds of votes to finally elect a Speaker). That control, granted to insurrectionists and fanatics, pushes us ever closer to a default this summer.

That potentially means:

• An inability to pay for critical programs like Medicare, Medicaid, Social Security, and veteran’s benefits
• A global recession worse than 2008, eliminating Biden’s historic record of jobs growth
• A downgrade of the US credit rating, increasing interest rates, and raising prices on household necessities
• And more…

We cannot allow this to happen.

GOP Freedom Caucus would cut Medicare to enrich Pentagon.

If You Have a Republican Representative:
• Call your representative and let them know you’ll be holding them accountable for their actions. Republicans are playing political games with the global economy. A default on our debt could be disastrous and the extremists in their party don’t seem to care. Call your representative and let them know that you do — and you’re ready to hold them accountable if they go along with their MAGA colleagues instead of acting in the interest of constituents like you!

• Submit a Letter to the Editor (LTE).Republicans are making a mockery of the legislative process, showing no ability or interest in governing. Use this LTE template to write an LTE on Republican focus on sabotaging Biden rather than leading, their blatant disregard for adhering to basic ethics, their lack of support for American families, or their attacks on our freedoms. What we can do now to weaken the Republican position could prove decisive in stopping them from holding our government hostage in the future.

If You Have a Democratic Representative:
• Call your representative and let them know they need to hold strong. When Republicans have used the threat of default in the past, Democrats have balked, proving to Republicans that they can win with their reckless threats. We need to hold strong against these MAGA extremists so we do not offer them more power. Democrats are doing a great job as a block to start the session. Let’s make sure they keep it up.

• Submit a Letter to the Editor (LTE).Write a letter championing your Member of Congress (MoC) for their work opposing MAGA extremism. Highlight all the good votes they have taken recently (like supporting abortion rights). And encourage them to continue to be fighters for the people. Public perception can turn quickly and we need to remind the people that Democrats are fighting for them while Republicans are pushing the nation to the edge.

Now is not a time to panic. We have until this summer to lift the debt ceiling and stave off the worst outcomes. We can fix this. Now is the time to get organized and ensure we’re in the best position to do so.

In solidarity, 
The Indivisible Team