CV NEWS FEED // National leaders are on a collision course to default on the federal debt if they don’t soon come to an agreement regarding the $31.4 trillion debt ceiling.
In a Monday letter to House Speaker Kevin McCarthy, R-CA, Treasury Secretary Janet Yellen warned it is “highly likely that the Treasury will no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by” the beginning of June.
Both parties have been locked in negotiations over the specifics of a plan to raise the this limit even higher.
A meeting Monday between President Biden and McCarthy ended without a deal on what increases would be made. The two parties disagreed on the particulars, as Biden proposed the creation of new taxes, while McCarthy insisted on including budget cuts in the compromise.
Congressman Patrick McHenry, R-NC, Chairman of the House Financial Services Committee, has also been involved in the talks with Biden. In speaking with CNN, he called coming to an agreement “a complicated piece of math” and said that his objective was “getting a deal that can pass the House, the Senate, and signed by the president.”
Reuters stated Tuesday morning that if Democrats and Republicans don’t jointly figure out how they will raise the debt ceiling by this day, it would “trigger an unprecedented debt default that economists warn could bring on a recession.”
This race to raise the debt ceiling is something that happens frequently in American politic. The Department of the Treasury’s website says that “since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents.”
Why does the federal government, regardless of party, continue to expand the maximum amount of money it can borrow while making little attempt to pay it back? More importantly, how can Catholic social teaching contribute to the solution?
The Debt Ceiling Explained
In CatholicVote’s February explainer, Erika Ahern summarized what the debt ceiling is and where the debate over it originated.
When you owe money, that’s called “debt,” and as with credit card debt or a mortgage, the American people pay interest on the money we owe.
The “debt ceiling,” then, is the legal limit on the amount of money Congress can borrow to pay for its programs. That limit started at $45 billion in 1939 – the dawn of World War II – and now sits at $31.381 trillion.
Both Republican and Democratic majorities have historically voted to raise the ceiling in order to avoid defaulting.
But why does the government, regardless of what party is in power, keep raising the debt ceiling – as opposed to maintaining its current level or even lowering it?
Ahern continued by saying that “once the government can take on no more debt” and is on the verge of running out of money, they have a few options. She explained:
In 2012, a Treasury Inspector General report noted that the least harmful scenario in this case would be to suspend all government payments – including social security, salaries for federal civilian employees, and veterans’ benefits, among others.
Instead, Congress has voted to continue to raise the debt ceiling and take on more debt in order to continue to fund its spending.
What this Means for Catholics
This seemingly endless quest of American politicians to keep borrowing money with no end in sight has been cautioned against in the Bible and by Church leaders.
Tom McClusky, CatholicVote’s Director of Government Affairs, noted this.
Psalms 37:21 tells us: “The wicked one borrows but does not repay; the righteous one is generous and gives.”
Pope Benedict XVI lamented the wickedness of running up debt, pointing out that the willingness on the part of many people and governments to do so means “we are living at the expense of future generations.
When we as a nation incur tremendous debt, $31 trillion and counting, with no plans on reducing said debt, then we are placing future generations in an unnecessarily precarious situation, which is immoral. Catholics have the key to the solution, and should take a firm public stand: Pay down the debt, live within your means, and give generously of the remainder.
