June 1st. That is the date that Fed
Chair Janet Yellen says that the federal
government will run out of money.
Now, if a deal on the debt
ceiling is not reached by then,
the government could shut down.
But right now talks are
underway at the White House.
This is a live look from Washington, DC.
House Speaker Kevin McCarthy and President
Joe Biden are meeting as they discuss
what is next for the debt ceiling.
Let's take a look at where
Republicans and Democrats stand.
With the clock ticking, President
Biden and House Speaker Kevin McCarthy
returned to tense negotiations about
raising the nation's debt ceiling.
Our credit card are a debt limit.
We have charged so much up that
it's bigger than our economy,
Sources tell CBS News the White
House is now offering to keep
spending flat from this year to next.
Republicans, they say,
want to increase defense spending while
cutting everything else by up to 22%.
I think we could.
We can get a deal tonight.
We could deal tomorrow.
But you've got to get something
done this week to be able to pass
it and move it to the Senate.
Treasury Secretary Janet Yellen
has indicated early June remains
a hard deadline or the US
risks defaulting on its debts.
I'm willing to cut spending,
and I proposed cuts and spending
of over a trillion dollars.
President Biden cut his trip to
Japan short on Sunday night to
attend the debt ceiling talks,
which lawmakers on Capitol Hill
say have reached a sensitive point.
I think people are goodwill.
I don't think there's any interest in
us delaying these tough conversations,
and so we want this to be productive.
Economists warned that default could
put millions of Americans out of work
and push the country into a recession.
Social Security checks could be delayed.
And the nation's credit rating
could be lowered. Nicole Skanga,
CBS News, The White House.
All right, so big picture.
Let's kind of whittle it down some.
We're going to dig into
some of the big questions.
First off, just what is the debt ceiling?
Will This limit has been
around for more than 100 years,
initially set up back in 1917.
It is the limit on how much money
the federal government can borrow
and then use to pay for things like
you just heard Social Security,
military salaries, tax refunds.
Congress sets the limit now.
Currently,
the ceiling is set at about $31.4 trillion.
Since 1960, Congress has raised, extended,
or revised the debt ceiling 78 times.
It's pretty common.
Another big question,
what exactly does borrowing
against the debt ceiling cover?
And what would be impacted
if a deal is not reached?
You heard a little bit of this as well.
The bills that the government
pays would be impacted.
So again,
we're talking things like Social Security,
Medicare benefits.
Military salaries,
interest on the national debt,
and any tax refunds and other
types of payments like that.
So if the government can't
borrow any more money,
it would stop paying those programs.
It means that anyone waiting on a tax
refund could see their check delayed.
It could also mean Social
Security checks could be delayed,
but I have to tell you,
it's important to note that this has not
happened in the previous past shutdowns.
Museums and national parks could be
closed and non essential government
workers would be furloughed.
Now states in areas with the most
federal workers would be the hardest
hit if the government defaulted on its
debts and was in fact forced to shut down.
In Washington DC,
one in every four jobs is tied
to the federal government,
but there are federal
workers really everywhere,
so we're kind of giving you the
whole national map so you can see
how many jobs would be lost even
if a shutdown lasted just a few days.
Days now.
This includes states with
large federal facilities,
national labs,
military bases.
Here in North Carolina,
we could expect to see at least
16,000 people out of work.
It's hard to know,
of course,
the full impact of what could
happen if a new deal on the
debt ceiling is not reached
and the government defaults
on the payment that it owes.
Because it's never happened before.
Let's verify with the experts.
So what if we do default?
Well, we can only speculate because,
as the White House explains,
the US has never intentionally defaulted
after not raising the debt ceiling,
but warns of widespread
economic fallout if it does.
This Treasury Department
report further explains,
quote Credit markets could freeze,
the value of the dollar could plummet,
US interest rates could skyrocket,
the negative spillovers could
reverberate around the world,
and there might be a financial crisis
and recession as a result of default.
The report examines the last time we teetered
on the edge of default back in 2011.
Though Congress eventually
did raise the debt ceiling,
we came so close to the brink that
the US credit rating was downgraded,
job growth slowed, the stock market fell,
and financial markets.
Were overall stressed for months.
Another big unknown is what bills would
be paid and if members of Congress
would keep getting their salaries.
Well, because the government has
never defaulted, there's really no
previous example of what could happen.
The Treasury Department writes
around 80 million checks a month.
Those checks are automated.
They do not pick and choose what gets paid.
Last week, two Republican House lawmakers
proposed a bill that would require
the Treasury to not pay members of
Congress during a default or shutdown.
The bill has not passed yet,
and even if it did,
it's not really clear if it's even feasible.
So for now,
we just wait watching that June 1st deadline.
Congress needs to act before then to
make sure that payments are not delayed,
and they are working on it.
Talks are underway at the White
House right right now,
with both Republicans and Democrats
hopeful a deal will happen.
I think we can.
We can get a deal tonight,
we get a deal tomorrow.
But you've got to get something
done this week to be able to pass
it and move it to the Senate.
All four congressional leaders
agree with me that the that default
is not, let me say it again,
default is not an option.