Updated May 8, 2023 at 11:02 AM ET
The U.S. government could default on its debt in a matter of weeks if it doesn't raise the debt ceiling.
That would spell "economic calamity," Treasury Secretary Janet Yellen warned this weekend.
"Whether it's defaulting on interest payments that are due on the debt or payments due for Social Security recipients or to Medicare providers, we would simply not have enough cash to meet all of our obligations," she told ABC's This Week. "And it's widely agreed that financial and economic chaos would ensue."
President Biden and Democrats in Congress say the U.S. should simply vote to increase the borrowing limit. But Republicans in the House so far have refused to approve any such legislation unless it also cuts future federal spending.
They were joined over the weekend by 43 Republican senators, including Minority Leader Mitch McConnell, who submitted a letter to Senate Majority Leader Chuck Schumer opposing a "clean" debt limit bill.
Biden and House Speaker Kevin McCarthy are set to meet on Tuesday to discuss the debt ceiling for the first time since February. McConnell, Schumer and House Minority Leader Hakeem Jeffries are also expected to be in attendance.
There's a lot at stake and no "face-saving off-ramp" in sight going into the meeting, NPR political correspondent Mara Liasson told Weekend Edition Sunday.
She says there are a few possible outcomes. Among them: Leaders could negotiate a deal and claim a political victory, or decide to kick the can down the road with a temporary debt ceiling increase, which would have to be negotiated later this year and could risk a government shutdown.
Or they could stay at an impasse and let the country default, with what economics say will be disastrous consequences.
"It's Congress's job to do this," Yellen said. "If they fail to do it, we will have an economic and financial catastrophe that will be of our own making and there is no action that President Biden and the U.S. Treasury can take to prevent that catastrophe."
A Republican lawmaker explains his party's stance
Rep. Dusty Johnson, R-S.D., the chair of the Republican Main Street Caucus, agrees with Yellen that defaulting on the debt would constitute a calamity.
"We should pay our bills," he told Morning Edition on Monday. "The constitution calls on us to do that and we should absolutely do it."
Why then, asked Morning Edition's Steve Inskeep, are Republicans intent on adding conditions?
Johnson says it would be irresponsible not to, as the country is dealing with what he calls "twin crises" of the debt ceiling and the national debt, which is now at almost $32 trillion.
"If you're a family who gets a maxed-out credit card bill and you just pay the bill and increase the limit on your credit cards without having a conversation at the family dinner table about what to do in the future, you're making a big mistake," Johnson says.
He points out that raising the debt ceiling and cutting federal spending have happened in tandem before, including under then-President Barack Obama and then-Vice President Biden in 2011.
Obama agreed to some spending restraints alongside raising the debt ceiling, after a drawn-out negotiations process that severely affected the stock market and lowered the U.S. credit rating.
Similarly, Yellen said over the weekend that "we're likely to see financial market consequences" even before the estimated June 1 default date if Congress doesn't act in the coming weeks.
Republicans control the House and are not without influence in a narrowly divided Senate. So couldn't they work out spending levels through appropriations bills, which fund the government each fiscal year?
Johnson says there's risk in doing it that way, since "we know that government shutdowns are not the way that any responsible country should be doing its business." He blames Biden's refusal to negotiate for bringing the U.S. this close to the brink.
"Had we just done our work three months ago, we wouldn't be talking about putting the stock market at risk," he adds. "We'd be talking about the budgetary controls that are moving us in the right direction."
Inskeep notes that many Americans, including Johnson's constituents, rely on federal funds for things like 401(k) plans, retirement funds and Social Security benefits. And he asks: Is Republicans' policy goal worth putting all that at risk?
"We put the retirement plans at risk ... if we do not act," Johnson says. Social Security's trust fund is projected to be insolvent by 2034.
However, the debt ceiling bill that House Republicans passed last month doesn't directly address Social Security, and leaders from both parties have said they will not touch entitlement programs in negotiations.
"We have a Washington establishment that has really on both sides of the aisle refused to acknowledge the serious crisis that is looming before us," Johnson says. "And I think we best sit down like big boys and big girls and address both of these problems, the time is right now."
The broadcast interview was edited by HJ Mai.
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