Debt Limit Discussions Show No Sign of Nearing Deal
On Tuesday, May 9th the meeting between President Biden and Congressional leaders came to a close without discussions showing signs of progress on a deal to determine the debt ceiling in order to avoid a possible estimated June 1, 2023 default by the U.S. Simply explained, the debt ceiling, also called the debt limit, is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations that Congresses and presidents of both parties have made in the past. According to the U.S. Department of Treasury, “failing to increase the debt limit would have catastrophic economic consequences. Most states would be “hit hard” economically by a “debt limit breach,” which occurs when the Treasury Department fails to make a payment to any creditor on time, but the level of impact would vary from state to state according to projections released Wednesday, May 10th by global credit ratings provider Moody’s. Those states having “large concentrations of federal workers or that have a number of jobs that rely on government funding” hit disproportionately harder — such as Washington, D.C., Alaska, Hawaii and New Mexico.