Washington, D.C. — On January 19, the United States hit the debt ceiling. Since then, the Treasury Department has employed “extraordinary measures” to avert a default. But at some point, most likely this summer, the Treasury Department will exhaust available measures, which will require Congress to raise, extend, or eliminate the debt ceiling. If it does not, the nation will enter default. A proposal put forth by some House Republicans does not rule out default and instead proposes to prioritize how the nation spends its available cash—an untested and unworkable idea—to cope with this crisis.
A new Center for American Progress analysis shows that this proposal is an alternative in name only—and the nation’s incoming revenues are insufficient to cover its obligations. By offering an illusion that there’s an alternative to raising or suspending the debt ceiling, this proposal increases the risk of default—and the economic harm that would result—by suggesting that failure to increase the debt ceiling can somehow be managed administratively. This new analysis examines why this proposal is unworkable and, thus, why Congress should act swiftly to raise or suspend the debt limit.
“The bottom line is House majority leaders’ proposal is dangerous, untested, and unworkable. This proposal puts the United States at a higher risk for default, which would cause catastrophic harm to the economy,” said Jean Ross, senior fellow of Economic Policy and co-author of the column.
“Current and former Treasury secretaries agree: The House majority’s plan cannot be feasibly implemented. This proposal is unworkable and opens up the door to disastrous effects on our economy,” said Alan Cohen, senior fellow and co-author of the column.
Read the column here: “The House Republican Proposal To Avert a Debt Ceiling Crisis Is Untested and Unworkable” by Alan Cohen and Jean Ross
For more information on this topic or to speak with an expert, please contact Sarah Nadeau at [email protected].