Time is running out before a potential government shutdown, and President Joe Biden claimed without evidence last Thursday that Republican-backed budget cutbacks would hurt voters and the U.S. economy.
Reports show that unless the Republican-controlled House and the Democrat-run Senate can produce a long- or short-term financing package and Biden signs it into law, the federal government would shut down for the fourth time in a decade the next month.
While Biden and House Speaker Kevin McCarthy (R) reached an agreement in May to raise the debt limit, some House Republicans are asking that spending for fiscal 2024 be reduced to $1.47 trillion. Republican leaders in the Senate, including Mitch McConnell, and the White House have already rejected this demand from House Republicans.
The Biden administration has said they would spend the rest of the year attacking the Republican economic agenda, which they refer to as “MAGAnomics,” the phrase used to represent Trump’s “Make America Great Again” policy of cutting corporate taxes and reducing regulations.
The Treasury Department reports that the U.S. national debt has surpassed $33 trillion for the first time ever, and the Biden administration and the House are headed for a showdown that might lead to the first government shutdown in almost four years.
The US national debt increased from $408 billion in 1922 to the current $33 trillion.
McCarthy is warring with his caucus over whether or not to back a short-term budget plan to keep the government working in exchange for support from members who are seeking deep cutbacks and restrictions on illegal immigration.
Reports show Fitch Ratings unexpectedly lowered the United States government’s credit standing this summer. The grade was lowered from AAA to AA+.
Fitch blamed the chronic degradation in standards of governance over the previous two decades, as well as mounting debt at the federal, state, and municipal levels. Fitch cited the growing partisan divide over spending and tax policies as a major factor in its decision.