The letter from Treasury Secretary Janet Yellen to House Speaker Kevin McCarthy of Calif., photographed Friday, Jan. 13, 2023, notifying Congress that the U.S. is projected to reach its debt limit on Jan. 19, and will then resort to "extraordinary measures" to avoid default. Credit: John Elswick / AP

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The federal government reached the debt ceiling on Thursday. The ceiling marks the most that the federal government can borrow – currently $31.4 trillion – without further action. As a result, the U.S. Treasury took steps, called “extraordinary measures,” to allow the government to continue to spend money.

Many Republicans in the U.S. House of Representatives have said they will not vote to raise the debt ceiling without significant cuts to federal spending.

The current debt ceiling has little to do with future spending. The ceiling must be raised to account for federal spending that lawmakers, including many Republicans, have already approved. Without a debt ceiling increase, the U.S. could default on its payments, which economists warn will harm the global economy and U.S. citizens.

“If the ceiling is not increased and the U.S. defaults on its debt, there could be dire consequences for average Mainers, who may see Social Security, military, tax refunds or other checks from the federal government paused. It also would affect the state’s 9,600 federal employees,” Bangor Daily News business reporter Lori Valigra wrote in a story posted Friday. About 235,000 Mainers received Social Security benefits in 2020, according to federal data.

Beyond these immediate impacts, economists warn that brinksmanship around the debt ceiling could have dire implications around the world.

“Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability,” Treasury Secretary Janet Yellen wrote in a letter to new Republican House Speaker Kevin McCarthy late last week.

Zachary D. Carter, the author of “The Price of Peace: Money, Democracy and the Life of John Maynard Keynes,” told Business Insider a default on the national debt would throw the country back to some of the worst days after the Great Recession in 2008, but with even more severe risks.

Because the U.S. Treasury bond “is the basic unit of global finance,” Carter said: “We are talking about every single financial institution in the world having to suddenly revalue the price of a basic asset that is used to settle balances every day.”

“We’d just be setting off a global financial crisis. What happens after that? No one knows,” he added.

No lawmaker should want to see any of this happen. Clearly, some Republicans are attempting to use the need to raise the debt ceiling as leverage to slash government spending, especially on programs that their party does not support. Does there need to be a debate about the size and sustainability of the federal budget? Absolutely. However, to be rational and comprehensive, that debate needs to happen when the financial stakes are not so high.

Lawmakers have used the debt ceiling as a bargaining chip before, including in 2021 when Republicans agreed to the short-term increase that was reached this week. The debt ceiling was raised three times during the presidency of Donald Trump, when the national debt grew significantly because of large tax cuts that weren’t paid for and large spending bills, approved by Congress on a bipartisan basis, to help with the coronavirus pandemic.

There of course need to be debate about federal spending, which is not sustainable at current levels. But, refusing to raise the debt ceiling, which unleashes a cascade of damaging consequences, is not the responsible way to have this debate.

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The BDN Editorial Board

The Bangor Daily News editorial board members are Publisher Richard J. Warren, Editorial Page Editor Susan Young, Assistant Editorial Page Editor Matt Junker and BDN President Todd Benoit. Young has worked...