The United States debt limit is a legislative limit on the overall debt the US government can incur. As the US keeps running budget deficits, the debt keeps increasing. Congress could deal with this permanently by either repealing the debt limit, or increasing it to a very large number.
But instead, Congress has only increased the debt limit enough to give grace for a year or two before it needs to be increased again. The last time the debt limit was increased was December 2021.
The US hit the debt limit on January 19 this year. The Treasury has been taking extraordinary measures to delay a default, but these measures could fail as early as June 1. While the US has never defaulted, there were debt limit crises in 2011 and 2013.
The main reason for the 2011 and 2013 crises was divided government – Democrat Barack Obama was president and Republicans controlled the House of Representatives. This situation is the same now, with Democrat Joe Biden as president and Republicans controlling the House. Republicans have attempted to use the debt limit to demand spending cuts.
A brief history of debt ceiling crises and the political chaos they’ve unleashed
Republicans only hold a 222-213 House majority, and it took 15 rounds of voting for Republican Kevin McCarthy to be elected House speaker in early January. But right-wing Republicans won concessions from McCarthy, and the speaker decides what comes to the floor for a vote.
To keep the right onside, McCarthy will probably deny a vote on any debt ceiling increase that excludes major spending cuts, and such cuts would be unacceptable to Democrats.
Democrats had overall control of the presidency, House and Senate until January 3 when the new House started. But they made no real attempt to increase the debt limit and avert a crisis until after the 2024 presidential election. If there is a default, the failure to increase the limit will come back to haunt Democrats, the US and the world economy.
A weaker economy in the presidential election year of 2024 is likely to hurt Biden, so Republicans have some incentive to not compromise on the spending cuts they are demanding.
On April 26, Republicans passed a bill through the House of Representatives by a 217-215 margin that would raise the debt limit in return for big spending cuts that Democrats strongly oppose. All Democrats that voted were opposed.
This bill has no chance of passing the Democratic-controlled Senate, and would be vetoed by Biden. But it showed that Republicans could pass their agenda. Had the House not passed this bill or something similar, there would be more pressure on Republicans to pass a “clean” debt limit increase – an increase without any spending cuts.
As it is, McCarthy can argue that the House has done its job, and that Democrats need to give ground on spending cuts.
In the last week there have been negotiations over the debt limit between Democratic and Republican leaders, but these negotiations have broken down in the last two days, with both sides blaming the other for changing their positions.
Left-wing Democrats have been urging Biden to use Section 4 of the 14th Amendment to the US Constitution, and effectively declare the debt limit unconstitutional. However, the US Supreme Court currently has a six-to-three right-leaning majority, so it’s unclear whether they would support Biden.
Trump way ahead of DeSantis in Republican primary polls
Republicans and Democrats will both select their presidential candidates for the November 2024 election in a series of nominating contests in each state in early 2024, at which delegates to the national conventions are elected. When we are closer to the voting in the early states, polls of those states will be useful, but for now the national polling is better.
Former President Donald Trump has 53.5% of the vote in the FiveThirtyEight aggregate of national Republican presidential primary polls. Florida Governor Ron DeSantis trails far behind on 20.8% and no other candidate has more than 6%. Since this aggregate started in early March, Trump has steadily increased his lead over DeSantis.
For the Democratic primary, there are polls that list many possible candidates, which indicate that Biden could face a contest if a high-profile candidate were to enter. However, Biden will easily defeat the only two other candidates who have actually entered: Robert F Kennedy Jr and Marianne Williamson.
General election Biden vs Trump polls are close
If Biden and Trump both win their parties’ nominations, which current polling suggests is likely, we will have a November 2024 rematch of the 2020 contest which Biden won. The RealClearPolitics average of national Biden vs Trump general election polls currently has Trump leading Biden 44.2-42.8%.
A key reason why this match-up is close is that Biden’s ratings have slumped since the beginning of his presidency.
In his first six months as president, Biden’s approval rating was over 50% in the FiveThirtyEight aggregate. But since October 2021, his approval rating has consistently been below 45%, while his disapproval has been over 50%. Biden’s ratings haven’t changed much in the last few months and are currently at 52.7% disapprove and 42.4% approve (net -10.4).
The two potential hurdles to Biden’s re-election are the economy and his age. A debt default would make the economy far worse, and Biden will be almost 82 by the November 2024 election, though Trump will be 78.