With a new majority in the House, Republicans have set their eyes on sweeping cuts to several federal programs.
Several House Republicans this week proposed budget cuts to entitlement programs such as Social Security and Medicare.
The bad news for the House GOP? With a Democratic Senate, there's little Republicans can do to actually enact budget cuts.
However, some House Republicans have floated using the debt ceiling as leverage to force cuts to programs such as Medicare.
What is the debt ceiling? It's a limit on the amount of money the federal government can borrow to pay its bills. (NPR)
Why does the US need to borrow money? TL;DR: the federal government spends more than it earns in tax revenue. (WaPo)
Therefore, the US needs to borrow money to fund programs such as Social Security, and meet the payroll for troops. (NYT)
Among the things the US borrows money to pay for: Medicare, federal employee salaries, interest on national debt. (NYT)
Since it was first imposed by Congress in 1917, the debt limit has been raised 78 times. The current limit: $31.4T. (NPR)
What happens if Congress doesn't raise the debt ceiling this year? The US would default on its debts—a historic first.
What happens if the US defaults on its debts? Per Treasury Sec. Yellen, a default would spell a global financial crisis.
According to the Washington Post, a default would cost the US 6M+ jobs and wipe out $15T+ in household wealth.
Congress last raised the debt limit in 2021 after a standoff with Republicans, narrowly avoiding a default. (WaPo)
Now, House Republicans are hoping to tie a debt ceiling increase with budget cuts to ram their agenda through the Senate.
They might pull it off: the House on Mon. approved a rules package that opens the debt ceiling up for a direct vote. (CNN)