We have one. It says that the US cannot borrow money above the debt limit. US Treasury is saying that they will need to borrow more to pay the government’s bills starting in June. Speaker McCarthy has written and passed a bill to raise the debt limit and do some noticeable cutting of federal spending. No spending cuts, not debt limit increase. Needless to say the Party of More Free Stuff (democrats) does not want to go along with any kind of spending cuts.
It should be possible to dicker and come up with a compromise that has enough spending cuts to satisfy Republicans and spends enough for feed democrats. Right now Biden and WRBA are not negotigiating; they are junketing way out in the Far East. They won’t be home til Monday. With out Biden and his heavy duty advisors at the table, face to face, nothing can get done.
Default is not the problem, despite what the TV keeps saying. Default is the failure of the US to pay its obligations, namely federal bonds and treasury bills when they come due. Federal tax revenue is about 60% of the needed money to run the government and pay the obligations. Obligations are like 10% of the tax revenue. Do a little trimming, pay some suppliers late, and we have plenty of money to pay down on bonds and T-bills.
I expect when Biden and WRBA get home they will be able to cut a deal with the Republican and McCarthy and get on with things.
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