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The debate over raising the U.S. debt limit is poised to be one of the hottest fights to hit Washington this year, and will feature a cast of characters both widely and lesser known to investors and everyday Americans. <\/p>\n
President Joe Biden and House Speaker Kevin McCarthy are set to play key roles \u2014 with Biden demanding a condition-free increase and McCarthy, a California Republican, insisting on corresponding spending cuts. <\/p>\n
Senate Minority Leader Mitch McConnell, a Kentucky Republican, has put the onus<\/a> of resolving the matter on Biden and McCarthy, while Senate Majority Leader Chuck Schumer<\/a>, the New York Democrat, largely has echoed the Biden White House\u2019s points about a hike without concessions. <\/p>\n But a chorus of other voices is emerging as Democrats and Republicans dig in on their respective positions, and the Treasury Department begins taking special measures to keep paying bills after the U.S. bumped up against its borrowing limit.<\/p>\n Read:<\/strong> U.S. runs up against its debt limit, so Treasury starts using \u2018extraordinary measures\u2019: Here\u2019s what that means<\/a><\/p>\n As Wall Street Rep. Scott Perry, the Pennsylvania Republican in charge of the House Freedom Caucus, said earlier this month there would be no clean increase<\/a> of the debt ceiling, and other members of the Freedom Caucus appear<\/a> to be behind him. <\/p>\n With the Freedom Caucus\u2019 increased power within the House as a result of the prolonged speaker vote, Perry is set to be a key figure as Republicans negotiate. The GOP holds 222 seats in the 435-member House, and it takes 218 votes to approve most bills, so any deal would have a very thin margin for error. \u00a0<\/p>\n See:<\/strong> Fight over House speaker job offers \u2018ominous portent of how the U.S. debt-ceiling fight will go\u2019<\/a><\/p>\n Rep. Jason Smith of Missouri leads the powerful House Ways and Means Committee, and has said he wants his fellow Republicans to address the debt ceiling by imposing \u201cfiscal sanity<\/a>.\u201d<\/p>\n \u201cDespite federal revenues hitting an all-time high of $4.9 trillion last year, Washington still cannot keep up with its spending habit,\u201d he said in a statement last week. \u201cUnchecked spending will have dire consequences.\u201d<\/p>\n Now see:<\/strong> Why the U.S. debt-ceiling is already worrying stock and bond investors<\/a><\/p>\n Smith added that failing to address spending now simply punts dealing with high debt.<\/p>\n Many Democrats are taking the White House\u2019s position<\/a> that there should be no spending cuts in exchange for a debt ceiling hike. Sen. Ron Wyden of Oregon, the chairman of the Senate Finance Committee, said that Republicans are holding the economy \u201chostage\u201d with their threats.<\/p>\n \u201cThe debt ceiling is not about adding new spending. It\u2019s about paying debts that the government owes,\u201d Wyden said in a statement. \u201cDemocrats will not entertain these threats from Republicans. \u2026 Republicans must stand down on the debt limit immediately.\u201d<\/p>\n Sen. Joe Manchin, a West Virginia Democrat, is taking another tack. He told Fox Business<\/a> last week he spoke with McCarthy about forming a committee<\/a> to create recommendations on how to get government spending under control.\u00a0<\/p>\n But Manchin made clear on Tuesday he also has lines in the sand when it comes to spending, calling potentially cutting Social Security and Medicare \u201cabsolutely ludicrous.\u201d<\/p>\n \u201cI\u2019m just saying basically take that off the table, then let\u2019s see what they present,\u201d he said about working with Republicans. \u201cIf they have other proposals, please bring them forward.\u201d<\/p>\n Meanwhile, a bipartisan group of lawmakers is beginning its own negotiations in the House. The group is spearheaded by Rep. Brian Fitzpatrick, a Pennsylvania Republican, and Rep. Josh Gottheimer, a New Jersey Democrat. The two are co-chairs of the bipartisan Problem Solvers Caucus.\u00a0<\/p>\n Both also said they oppose any cuts to Social Security and Medicare but see this as an opportunity to tackle the tricky topic of spending.<\/p>\n \u201cWe should have a conversation about our longer-term economic and fiscal health,\u201d Gottheimer said on Tuesday. \u201cThere are areas that are reasonable, and there are areas that are unreasonable,\u201d he added about House Republicans\u2019 early demands.\u00a0<\/p>\n Gottheimer also said he\u2019s pleased to see that Biden and McCarthy are planning to meet, even if for now the two remain far from agreement on the debt limit. \u00a0<\/p>\n Fitzpatrick is pushing to get rid of the debt ceiling altogether, a mechanism that he said doesn\u2019t make sense. \u201cDefaulting is really bad, devaluing your currency is really bad, we shouldn\u2019t have to choose between those two,\u201d he said, lamenting the current system.\u00a0<\/p>\n He\u2019d prefer capping the debt at a percentage of gross domestic product, where after it breaches that point certain budgetary restraints kick in. With this, he said, everyone will have skin in the game to try to avoid a rising debt and the automatic spending reforms that come with it. <\/p>\n And if all these negotiations fail, Fitzpatrick has hinted<\/a> recently he and a few other Republicans could work to pass a discharge petition, a way for 218 members to force a vote in the House, with Democrats. But he doesn\u2019t expect that to be considered any time soon, calling it<\/a> \u201cthe absolute last option.\u201d<\/p>\n
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\n and Washington hold their breath for a growing battle, here\u2019s a look at some members of Congress to watch as the debate heats up. <\/p>\nGOP Reps. Scott Perry and Jason Smith<\/h4>\n
Democratic Sens. Ron Wyden, Joe Manchin <\/h4>\n
Bipartisan Problem Solvers Caucus<\/h4>\n