September 21, 2021
The government shutdown could happen in a matter of days.
But the House passed a bill to temporarily keep the government running and raise the debt ceiling…here’s the problem – it doesn’t look like it’ll pass the Senate. And the clock is ticking with dire consequences.
There’re actually two major crises happening at the same time…
Crisis one – a looming government shut down which we deal with every year.
I told you in this video yesterday, the federal fiscal year ends on September 30th and if Congress doesn’t either pass a budget – which they aren’t going to do – or pass a continuing resolution to keep the government temporarily funded while they figure out the budget, the government will shut down and you know what that means. Big trouble for all federal workers, military members, their paychecks, relief for those impacted by natural disasters among other things. The bill the House passed tonight, kicks the can down the road to keep the government funded for the next two months. Then we’ll have this fight all over again.
Crisis two is the federal government heading towards defaulting on our national debt.
The easiest way I can explain it to you is this. Think of your own financial situation. You’ve got enough money to pay your bills until mid-October. But like everyone else, during the pandemic you’ve racked up a bunch of extra debt and in order to not default– you have to get creative so you ask the bank that holds your credit card, to increase your credit borrowing limit so you can pay for those expenses. And because you’re a unicorn and have a perfect credit score – you get it. Keep in mind, just because you get the credit limit increased, doesn’t mean you can spend more money…that just gives you the room you need to pay the bills you’ve already racked up.
That’s basically what’s happening with the US government. We have an excellent credit rating – we always pay our bills. But a century ago – congress put a limit on the amount of money we can borrow to pay for our obligations – that limit is known as a debt ceiling. In order to not default on our debts, congress needs to pass a bill to raise the debt ceiling — which they’ve done more than 75 times in the last 50 years. The last time congress raised the debt ceiling was when president trump was in office.
What’s the big deal if we default? Well, the us government might not be able pay its obligations — like social security payments, veterans’ benefits and salaries for federal civilian employees and the military – just to name a few. Not to mention the financial chaos that would ensue in the us and world markets. Oh – and it’ll cost more money for the us to borrow money in the future.
At this point Senate Republicans say may be open to passing the continuing resolution to keep the government temporarily funded — but they won’t raise the debt ceiling. So what happens next is anyone guess– like I said yesterday – these next few days are going to be rough.
