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How the debt limit debate could impact you

The debt ceiling isn't the only issue facing Congress
Debt Limit Yellen
Posted at 3:45 PM, Sep 15, 2021
and last updated 2021-09-15 20:36:22-04

WASHINGTON — Terms and phrases like the "debt ceiling," reconciliation" and "continuing resolution" may sound like complicated government policies and procedures.

However, the issues and policies are quickly consuming Washington with each having the potential to impact your life.

THE DEBT PROBLEM

The debt ceiling is the legal limit on the total amount of federal debt the government can accrue.

It currently stands at $28.4 trillion.

Secretary of the Treasury Janet Yellen wrote last week to Congress that “extraordinary measures” are being taken right now to keep America’s debt below that number, but she said she is running of resources and needs it raised.

Yellen stressed if Congress doesn’t raise it by the end of October, “the United States of America would be unable to meet its obligations for the first time in our history.”

How would that impact you?

Social Security checks and veteran benefits could be delayed.

People's 401k would likely lose value because the threat of a default would disrupt the markets.

As for where the debate stands, Democrats could raise the debt limit on their own. However, they want Republicans to raise it with them, arguing Democrats did it when former President Trump was in office.

Republican leaders have said they have no interest in contributing to any more Democratic spending.

KEEPING THE GOVERNMENT OPEN

The next key debate involves a "continuing resolution.”

That’s important because, in addition to issues with the debt, the federal government is set to run out of money on Oct. 1.

A “continuing resolution” is needed to keep keep the federal government running. If it doesn’t happen, national parks could be forced to close and federal workers could temporarily lose out on paychecks.

Democrats, for the moment, appear poised to pass something to keep the government running. However, that vote still hasn’t been scheduled.

RECONCILIATION DEBATE

All of this is happening as Democrats are trying to pass President Biden’s multi-trillion-dollar spending bill through the “reconciliation” process since it’s generating no Republican support.

What is reconciliation?

It allows for spending bills to pass by a simple majority vote in the Senate and not the usual 60 votes, which are usually needed to break a filibuster.

This bill, which would raise taxes on high-income earners making more than $400,000 and businesses, would impact you or your employer's taxes, potentially, while also creating new programs like paid family leave and free community college.