Ylan Mui joins Closing Bell with news from Washington, D.C., where the Treasury Department estimates it will hit the debt ceiling by Nov. 4 if it’s not raised by Congress. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
Politicians in Congress are currently in a staredown over the debt ceiling. Lawmakers must reach an agreement soon to allow the government to meet its payment obligations for Social Security, tax credits and military salaries, among other items.
Treasury Secretary Janet Yellen warned that the Treasury will likely run out of ways to pay its bills at some point in October.
Democrats want to suspend or increase the debt limit through legislation. However, Senate Minority Leader Mitch McConnell, R-Ky., has said that Democrats need to find a way to pass it without any support from the GOP.
Democrats argue that raising the ceiling will simply allow the U.S. Treasury to pay for spending and tax cuts that were greenlit during the Trump administration, while Republicans say they won’t help lift the debt limit because of the Democrats’ $3.5 trillion spending plan. Suspending or increasing the limit does not authorize any new spending.
The Republican opposition may force Democrats to lift the ceiling on their own as part of the spending package, which they plan to pass without the GOP through budget reconciliation. The process requires only a simple majority in the Senate split 50-50 by party.
So what does all this mean for you? Here’s what the debt ceiling is and how a failure to raise it could have far-reaching effects in the economy.
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