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Is Washington finally getting serious about the debt ceiling?

Every day there's a warning about how catastrophic a default on the national debt would be. What's it going to take to avoid that?
House Speaker Kevin McCarthy
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How would a U.S. debt default play out in Texas?

May 18, 2023
Half a million jobs could be lost in the second-biggest state economy. Pensioners, the food insecure and many others could suffer.
Treasury chief Janet Yellen has warned that the federal government could run out of money by June 1. Moody’s estimates that in a default, the giant Texas economy could lose more than half a million jobs.
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Taxpayers aren't the only ones disappointed with taxes this year

May 15, 2023
Federal tax revenue is coming in short while the debt ceiling remains unresolved. The problem was signaled by meager refunds.
So far this fiscal year, the IRS has brought in an estimated $250 billion less than forecast, possibly caused by lower capital gains tax receipts and postponed filing in California.
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Clawing back unspent COVID funds might contribute to a debt ceiling solution — but not much

May 15, 2023
The exact amount left from pandemic spending bills could be as little as $30 billion — a fraction of this year’s federal deficit.
Congress passed six COVID spending bills totaling $4.6 trillion, according to the Government Accountability Office. But most of that money is already gone.
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The markets are taking debt limit uncertainty in stride — for now

May 9, 2023
Stock markets aren't upset by the debt limit debate. But that could change as the June 1 default deadline draws closer, analysts say.
The stock market doesn't have a lot to react to because little is happening in terms of raising the debt limit, says Ian Dew-Becker, a finance professor at Northwestern University. Above, a trader at the New York Stock Exchange.
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Yellen: U.S. could hit debt limit as soon as June 1

May 1, 2023
The treasury secretary urges Congress to protect nation’s “full faith and credit” by raising the government’s borrowing authority.
In a letter to House and Senate leaders, the treasury secretary urged Congress “to protect the full faith and credit of the United States by acting as soon as possible.”
Stefani Reynolds/AFP via Getty Images

Why is it so hard for Congress to deal with the national debt?

Apr 20, 2023
Reining in our debt amid the debt ceiling battle would require big — and painful — changes to government spending and taxation.
House Speaker Kevin McCarthy's terms for lifting the debt ceiling would limit discretionary spending, roll back some tax credits, end student loan forgiveness and repeal additional IRS funding, among other things.
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The last time the U.S. almost defaulted on its loans, the consequences were expensive

Apr 17, 2023
The phrase "debt ceiling" brings some people right back to 2011, when the U.S. also went down to the wire.
Speaker of the House Kevin McCarthy delivers a speech about the economy and debt ceiling at the New York Stock Exchange on April 17.  McCarthy said that “defaulting on our debt is not an option.” But neither McCarthy nor the White House are showing any signs of compromising.
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Buckle up for a big economics week in Washington

Mar 6, 2023
Fed Chair Jerome Powell testifies on Capitol Hill tomorrow and Wednesday. President Biden is set to release a budget outline on Thursday, and we get February jobs numbers this Friday.
Above, Federal Reserve Chair Jerome Powell testifies to Congress in June. He's slated to appear before lawmakers again this week to discuss the central bank's activities and a range of economic issues.
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Why comparing government and household spending doesn't quite work

Feb 16, 2023
It's like comparing apples and oranges, professor Golnaz Motie says, because the government has many more tools and huge immediate obligations.
House Speaker Kevin McCarthy has compared the federal debt ceiling to a household's credit limit.
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