WASHINGTON \u2014 The Republican-controlled House has planted the seeds for a debt-ceiling showdown, with Speaker Kevin McCarthy endorsing a push by his hard-liners<\/a> to demand spending cuts as part of any extension of the country\u2019s borrowing authority.<\/p>\n The political divide is deep and the stakes are high.<\/p>\n Ultraconservative lawmakers insist they don\u2019t want the country to default, but their conditions for raising the debt limit are unlikely to be accepted by the Democratic-led Senate or President Joe Biden.<\/p>\n Republicans are on a collision course with the White House, which is demanding that Congress raise the debt limit without conditions.<\/p>\n If they fail to resolve their differences and cause a default, the range of consequences includes a stock market crash, a recession, higher interest rates for consumers, a weaker dollar, a U.S. credit downgrade and a government unable to meet all its obligations, from funding the military to providing Social Security benefits.<\/p>\n It\u2019s a legal limit dating back to 1917 that caps the level of debt that the federal government can assume. Once the U.S. hits the limit and exhausts ways to pay its bills, Congress must lift the ceiling in order for the government to continue to borrow to meet its obligations. If it doesn\u2019t, the country could be forced to default, which experts warn would be economically catastrophic.<\/p>\n Republicans have waged heated battles over the debt ceiling, most notably in 2011, but they have always been resolved in time.<\/p>\n The issue is poorly understood by the public and is often falsely portrayed as a vote to spend more money, when it is simply about paying bills that the U.S. has legally imposed. Congress is unique in that it regularly votes to raise spending or cut taxes, which adds to the debt, but also forces itself to vote separately on whether the country should borrow to pay those bills.<\/p>\n Officially, the U.S. is expected to hit the borrowing limit Thursday. After that, the Treasury Department will use \u201cextraordinary measures\u201d to keep paying bills, which is expected to continue until \u201cearly June\u201d when Congress will need to act, Treasury Secretary Janet Yellen told McCarthy, R-Calif., in a letter<\/a> Friday.<\/p>\n The national debt is about<\/a> $31.4 trillion.<\/p>\n Conservative lawmakers say that as part of their negotiations to allow McCarthy the speakership, it secured assurances to include major spending cuts to balance the federal budget in any debt limit increase. And to enforce that, they\u2019ve secured other rule changes that give a small group of members the power to remove McCarthy<\/a>.<\/p>\n But Democrats, who control the Senate and the White House, are unlikely to accept those cuts. They are also opposed to granting policy concessions to lift the debt ceiling, particularly after a 2011 showdown, during Barack Obama’s presidency, when a GOP House brought the U.S. to within days of economic disaster and caused a rating downgrade by Standard & Poor’s for the first time.<\/p>\nWhat is the debt ceiling?<\/strong><\/h2>\n
When is the debt ceiling deadline?<\/strong><\/h2>\n
Why does a GOP House complicate debt ceiling negotiations?<\/strong><\/h2>\n