![\"Illustration](\"https:\/\/images.axios.com\/4yULuXEQEAbPnbbqrKjq6WVW9AA=\/0x0:1920x1080\/320x180\/2023\/01\/19\/1674168726048.png?w=320)
<\/span>Illustration: A\u00efda Amer\/Axios<\/p>\n<\/figcaption><\/div>\n
The roots of today’s debt-limit standoff stretch back to 2011<\/a>, when the Tea Party movement helped force then-President Obama to agree to future spending caps in exchange for lifting the ceiling.<\/p>\n Zoom in: <\/strong>For Republicans, the achievement “validated one of the animating forces of the right over the past decade-plus \u2014 that the party\u2019s failures are a result of weak, feckless leadership, and if they fight, they win,” says GOP strategist Liam Donovan<\/a>.<\/p>\n Driving the news: <\/strong>The Treasury Department has initiated what it calls “extraordinary measures<\/a>” after the U.S. officially hit its $31.4 trillion debt limit on Thursday, giving the Biden administration and Congress six or so months to stave off a catastrophic default.<\/p>\n Why it matters: <\/strong>Every debt-ceiling standoff begins with both sides digging in their heels \u2014 and ends with one of them blinking. But the sour mood in Washington \u2014 and on Wall Street \u2014 suggests this time could be different<\/a>.<\/p>\n What’s happening:<\/strong> The Trump era’s political incentives \u2014 including online fundraising that relies on hyperbole and bluster \u2014 have encouraged House Republicans to adopt a politics of grievance and intransigence.<\/p>\n The intrigue: <\/strong>Today’s populist, culture war-driven GOP is less beholden<\/a> to the business establishment<\/a> than it once was, weakening the stakeholders most vocal about the dangers of playing with the country’s credit. <\/p>\n Below are five possible scenarios <\/strong>for how one of the most consequential political fights of the Biden presidency could end:<\/p>\n <\/div>\n\n
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Averting disaster<\/h5>\n
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