Debt limit bill: As McCarthy tries to get House votes, U.S. default now projected in early June
The U.S. could default on its debt in about a month, according to three new analyses, but those projections don't seem to be motivating Republican holdouts to vote for the GOP's debt limit bill.
House Speaker Kevin McCarthy told reporters Tuesday it will pass this week, but at least four Republicans were still a firm "no" on the measure that same day. Several others have not said if they will support it. With a five-member majority, McCarthy doesn't have many votes to spare.
Even if the House passes the GOP debt limit bill, it will not advance in the Democratic-led Senate.
At most, a passage in the House would give McCarthy perceived leverage to negotiate with President Joe Biden and Democratic leaders on federal spending.
But Biden has said he will not negotiate on the debt limit and has called on Republicans to raise the ceiling as they did three times without pushback during the Trump administration.
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What is the debt limit and how does it impact you?
The debt limit is the amount of money the U.S. government is allowed to borrow to pay its bills, such as Social Security payments and military salaries.
That limit was reached in January and since then Treasury Secretary Janet Yellen has been using extraordinary measures to pay the bills. She previously estimated she could do that until June 5, which is when she expects the government to run out of money.
The Congressional Budget Office had projected sometime later this summer, as had financial firms Goldman Sachs, Moody's Analytics and Wells Fargo.
But all three firms recently projected an early June deadline looks likely because the government is collecting 35% less in taxes this year, meaning it has less revenue and money to pay the bills.
If those projections are true and Republicans don't lift the debt limit during the 15 days they are in session between now and then, a default would impact all Americans.
It would mean higher home and auto loan rates and credit card payments, officials have warned, and could stop payments on government programs like Social Security. Bondholders would also not be paid what they're owed on time.
If the U.S. defaults, it would be "catastrophic," Yellen said earlier this year.
"It is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security," she said.
What it means: Debt limit forecast says US could be in default by summer. Here's how that could impact you
McCarthy says U.S. will not default
As McCarthy has tried to get his members on the same page, he tried to reassure Wall Street leaders and markets last week that the U.S. would not default on its debt.
A GOP plan would raise the debt limit into May 2024 in exchange for spending cuts in some of the largest government aid programs, such as food stamps. Democrats do not support the cuts.
The ongoing brinkmanship with the White House is nonetheless causing anxiety throughout the financial sector and struggling to get votes for the party's own debt limit bill does not bode well for raising a ceiling.
With 15 days in session to go before the projected default date in early June, Republicans are racing against the clock to pass their plan, have McCarthy negotiate with the president and raise the debt ceiling.
'A ticking time bomb': House Speaker Kevin McCarthy says House will vote on debt limit
Candy Woodall is a politics editor for Paste BN. She can be reached at cwoodall@usatoday.com or on Twitter at @candynotcandace.