Treasury secretary Janet Yellen is warning the U.S is expected to hit its debt limit on Thursday the national debt stands at more than 31 trillion dollars the country's total borrowing limit is 31.4 trillion secretary Yellen told Congress on Friday that once the limit is reached the treasury will start taking quote Extraordinary Measures to.
Prevent a default so CBS News Congressional correspondent Scott McFarland is joining us now from Washington to tell us exactly what this means can you explain what hitting the debt ceiling means and what the consequences might be hey Marie good morning first of all this is going to be likely the defining issue of the next.
Year in Congress this one transcends everything else because the debt ceiling for the federal government is like your credit card limit once you hit it you can't borrow anymore which means you can't pay down the debts you've incurred the government would not be able to pay for things like Social Security Medicare veterans benefits air traffic.
Controllers food safety inspectors this is not a realistic proposition so something needs to be done to raise the debt ceiling after Thursday now the treasury secretary says she can move some things around some Extraordinary Measures to buy the federal government some time but only sometime a matter of weeks potentially a few months until.
This crisis hits again and there's no more flexibility Republicans and Democrats have divided control of Congress and they have divided views over what to do about this so a potential cataclysmic face off seems imminent now so tell us about the quote Extraordinary Measures secretary Yellen plans to take.
To prevent a potential default if she will not stop paying for veterans benefits Social Security air traffic controllers what she can do and the Department of Treasury can do is stop paying for things that don't have an immediate benefit or need like stop making some payments towards pensions and retirement benefits for federal.
Workers that aren't going to be tapped into in the next few months anyhow they'd make those payments whole after the crisis subsides you can stop paying into Thrift Savings programs those are basically the federal government versions of 401ks because again the federal workers won't be tapping into those immediately you can wait and make.
Those payments whole later but there's only a limited amount of bandwidth there you can only buy yourself a matter of weeks because the federal government spends trillions of dollars on things they can't pause spending on that's why this is such a high stakes game of chicken and at this moment this looks exact like the standoff did 11 or 12.
Years ago when this was the last an issue where neither side seems willing to bend house Speaker Kevin McCarthy spoke about a potential spending cap yesterday on Fox News here's what he had to say When Donald Trump was president and when Nancy Pelosi was speaker that's exactly what happened for them to get a debt.
Ceiling lifted last time they agreed to a spending cap I believe we can sit down with anybody who wants to work together I believe this President could be that person that's the conversation I had with the president I want to sit down with them now so there is no problem all right so could there be common ground between with with President Biden and.
What else can lawmakers on Capitol Hill do to prevent the debt hitting the debt ceiling there's no indication that there's a Meeting of Minds here as we approach this deadline there's almost a philosophical difference more than a practical one Republicans believe especially in the U.S house that they need to exact Some Cuts in spending to.
Reduce the deficit reduce the need to have to borrow as part of any deal to raise the debt ceiling the White House has said there's no negotiating over this this is too Radioactive It's too toxic to even play with negotiating on this issue if we're going to make Cuts we can do that through the traditional government spending bills that.
Republicans have to approve before they become law we don't negotiate on the debt ceiling so as long as that philosophical dispute is there this is a particularly dangerous thing because in 2011 when these similar political Dynamics existed and a similar standoff occurred it hit the U.S credit rating it damaged the stock market it hit the.
Economy in a real way and it wasn't even breached it was just approached and we seem to be on a Glide path toward approaching a debt limit standoff right now all right Scott McFarland for us in DC Scott as always my friend thank you
The executive can't prioritize paying funds from latest month-to-month tax profits? No longer per Larry Kudlow & he oughta know. The Democrats, led by Uncle Joe, refuse to barter.. why? Clearly infamous. “My means or the twin carriageway.” Factual what the nation wants, a mule of a President..let's hump Brandon.
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