Democrats have their “stimulus” plan enacted into law, but how will Congress pay for its $1.9 trillion (plus interest) in debt? President Joe Biden may have inadvertently given a hint in his infamous 2009 malapropism about the nation needing to spend money to keep from going bankrupt.
Biden originally made his comments about Obamacare, but they may also apply to a potential strategy that Democratic leaders could use, which would hold the nation’s debt limit hostage to pass another massive spending spree.
Background on the Debt Limit
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A budget and spending agreement signed into law in 2019 suspended the nation’s debt limit through July 31. On August 1, the debt limit will reset at its new level, likely north of $28 trillion, at which point the Treasury Department will use extraordinary measures to remain below the new statutory limit.
Based on past experience, extraordinary measures will create about $300 billion of fiscal headroom until Congress raises the limit. But