Biden Administration Grapples With The $2 Trillion Debt Crisis And A Looming Government Shutdown

By: Alec Donaldson | Last updated: Nov 22, 2023

The Biden administration is confronting the specter of economic upheaval, as it grapples with an impending government shutdown and a burgeoning $2 trillion federal deficit.

Potential Congressional Shutdown

President Biden’s administration finds itself in a challenging predicament as the month’s end rapidly approaches, and the possibility of a congressional shutdown looms unless a new budget or stopgap measure is ratified.

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The Deficit Could Double

Simultaneously, the forecasted figures reveal an unsettling reality: the federal deficit could be poised to double by the close of this fiscal year on September 30th.

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$2 Trillion By This Year's End

Just last year, the deficit stood at a staggering $1 trillion (£790 billion). However, projections from the Committee for a Responsible Federal Budget suggest that this figure could skyrocket to nearly $2 trillion (£1.58 trillion) by year-end.

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Counterbalancing The Deficit

Despite the backdrop of a robust U.S. economy, which, under normal circumstances, would act as a counterbalance to the deficit, Americans could soon be faced with increased interest payments and decreasing tax revenues.

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White House Pushes For Appeals

Amid these impending financial challenges, the White House has made multiple appeals. Recently, it implored Congress to embrace a short-term funding extension in an attempt to avert the looming government shutdown.

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An Urgent Situation

A spokesperson for the Office of Management and Budget emphasized the urgency of the situation, telling Axios, “Although the crucial work continues to reach a bipartisan, bicameral agreement on fiscal year 2024 appropriations bills, it is clear that a short-term continuing resolution (CR) will be needed next month.”

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A "Mess"

However, achieving this resolution appears fraught with challenges. Senate Minority Leader Mitch McConnell publicly criticized the negotiations over government funding, describing them as a “pretty big mess.”

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Reaching An Agreement

He elaborated on the discord, saying, “The Speaker and the president reached an agreement which I supported in connection with raising the debt ceiling to set spending levels for next year. The House then turned around and passed spending levels that were below that level.”

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Impeachment Inquiry

Amidst the tumult, some staunch Republican figures have adopted more extreme positions. Representative Marjorie Taylor Greene of Georgia firmly stated that she would not vote to fund the government unless an impeachment inquiry into President Biden is initiated.

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There Could Be A Government Shutdown

However, House Speaker Kevin McCarthy injected a dose of realism into the situation. He pointed out that a government shutdown would impede Republicans’ efforts to investigate Biden or delve into matters concerning his family. “If we shut down, all the government shuts it down – investigation and everything else,” he explained. “It hurts the American public.”

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Costly Effects Of The Pandemic

In the wake of the pandemic, the deficit soared to an unprecedented $2.8 trillion (£2.22 trillion), driven by unforeseen Covid-related expenditures, according to reports from the Congressional Budget Office.

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Negative Consequences

Andrew Bates, a White House spokesperson, echoed the concerns of many by emphasizing the negative consequences of a government shutdown instigated by congressional members.

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A Shutdown Would Drastically Impact Everything

Bates affirmed in his statement from last week, “The last thing the American people deserve is for extreme House members to trigger a government shutdown that hurts our economy, undermines our disaster preparedness, and forces our troops to work without guaranteed pay.”

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Unpredictable Future

As the deadline approaches, the Biden administration, in conjunction with a deeply divided Congress, must navigate this treacherous terrain to avert an economic catastrophe. With the eyes of the American public keenly fixed on the proceedings, the coming days could result in high stakes and potentially devastating consequences for the economic future of the country.

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