As the US creeps ever closer to a devastating debt default, which would immediately spiral the country and likely the world into a financial crisis, Republicans aren't preparing to negotiate — they're preparing emergency measures.
As The Washington Post reported on Wednesday, Republican lawmakers on the House Ways and Means Committee will hold a panel on Thursday to discuss debt prioritization, in which the government would prioritize paying certain obligations over others should the US default on its debt.
Per the GOP legislation, known as the Default Prevention Act, the government would be able to continue borrowing money to cover existing obligations, along with ensuring federal benefits like Social Security don't lapse.
Treasury Secretary Janet Yellen has previously slammed the idea of debt prioritization, saying in January that "a failure on the part of the United States to meet any obligation, whether it's the debt holders, members of our military, or to Social Security recipients, is effectively a default."
"I will also say that Treasury systems have all been built to pay our bills, to pay all of our bills when they are due and on time and not to prioritize one form of spending over another," she said.
The US is facing yet another debt ceiling crisis, as the country is just months away from being unable to pay off the spending it's already authorized. If the debt ceiling is not raised, it could be financially catastrophic, Yellen has said.
"This economic catastrophe is preventable. The solution is simple: Congress must vote to raise or suspend the debt limit," Yellen said in February. "It should do so without conditions. And it should not wait until the last minute. I believe it is a basic responsibility of our nation's leaders to get this done."
Even a very short default would mean one million jobs lost, and send the US into a mild recession at the end of the year, according to a Moody's Analytics analysis. A prolonged breach would mean 7 million jobs lost, and stock prices tanking by a fifth — wiping out $10 trillion in household wealth.
While President Joe Biden is expected to unveil his federal budget in Philadelphia on Thursday, Democrats are still waiting for Republican lawmakers to release their formal plan to raise the debt ceiling. They have floated various spending cuts they could support in a potential debt limit deal, but with the US as soon as 4 months away from a default, Democrats have been urging the opposing party to stop talking about negotiations and move forward with a plan to prevent default.
"Republicans have said they will release a plan, they say they want spending cuts... What is the holdup," Senate Majority Leader Chuck Schumer wrote on Twitter on Tuesday. "Speaker McCarthy: It is now March 7th. The debt ceiling X Date is fast approaching. Stop dodging and show us the Republican plan."
McCarthy has said he wants to continue negotiating with Biden over the debt ceiling — but the president has insisted it's not a matter to negotiate, and each day without a formal plan is a day closer to a financially devastating default.
