The Daily Mail: Americans alarmed as debt default looms
This article originally appeared on the Daily Mail
US voters agree that they don't want a debt default and ensuing market chaos
But they're split on whether Joe Biden or Kevin McCarthy knows the way forward
About half want a quick debt limit lift, the rest want to see spending cuts first
Three quarters of Americans are worried that their overstretched household budgets will take another hit if decision makers in Washington fail to agree on raising the debt ceiling, new polling reveals.
Some 76 percent of US voters say the two sides must reach a deal because a default would put added financial stress on their families, a Reuters/Ipsos survey shows. That includes most Democrat and Republican voters.
Only 29 percent said they thought the issue was being overblown.
The results come as President Joe Biden, a Democrat, was set to meet with top congressional Republican Kevin McCarthy and others to cut a deal on raising the $31.4 trillion debt ceiling and averting an economically catastrophic default.
Economists say a default would roil global financial markets, delay welfare payouts, plunge the US into recession, wipe out 7 million jobs, and jack up mortgage rates and credit card payments.
Cole Lyle, a marine veteran who heads the nonprofit Mission Roll Call, said disabled veterans were among those at risk of delayed payments in the event of a default.
'Some $25 billion in veteran benefits could be delayed if Congress does not resolve the debt ceiling crisis,' Lyle told DailyMail.com.
Biden and McCarthy have little time to reach a deal.
The US Treasury Department says it could run short of money to pay all its bills as soon as June 1.
The survey of 4,415 US adults shows that voters are split on the best way to resolve the months-long standoff, meaning neither Democrats nor Republicans have a clear advantage in public opinion.
Some 49 percent of voters said Congress needs to quickly raise the debt ceiling without conditions to avert default, echoing Biden's position.
That includes 68 percent of Democrats and 39 percent of Republicans.
But 51 percent of Americans said the debt ceiling should not be raised without substantial spending cuts — mirroring the position held by Republicans, who hold a majority in the House of Representatives.
That includes 69 percent of Republicans and 42 percent of Democrats, the poll found.
The polling comes after months of runaway inflation and economic uncertainty that has left millions of Americans struggling to make ends meet and turning to credit cards as a fallback.
The debt balances of US households set a fresh record high of $17.05 trillion during the first quarter, the Federal Reserve Bank of New York reported this week.
That debt load has spiked by $2.9 trillion since the end of 2019.
Republicans, who control the House of Representatives by a 222-213 majority, have for months demanded that any increase in the government's self-imposed borrowing cap be linked to spending cuts.
In the past week, staffs for both sides have discussed a range of issues, including spending caps and changes to energy permitting, in exchange for votes to lift the limit, insiders said.
Addressing a group of bankers on Tuesday, Treasury Secretary Janet Yellen said failing to raise the debt ceiling would trigger a financial crisis and upend the nation's Covid-19 recovery.
'Time is running out. Every single day that Congress does not act, we are experiencing increased economic costs that could slow down the US economy,' Yellen warned.
'There is no time to waste.'
In a surprise development over the weekend, Biden expressed an openness to tougher work requirements for welfare programs, a top priority in the House GOP's debt limit bill.
Biden said that he'd voted for the 'tougher work requirements' as a senator in the past but 'for Medicaid it's a different story, so I'm waiting to hear exactly what their proposal is.'
The House Republicans' debt limit bill, the Limit, Save Grow Act, included stricter work requirements for Medicaid, SNAP and TANF.
Biden has also seemed open to clawing back unspent Covid-19 funds, estimated to amount to between $50 billion and $70 billion. He's reportedly open to discretionary spending craps through the remainder of his term.
In exchange, Biden is demanding Republicans drop their attempt to roll back his key legislative accomplishments, including student debt relief, limit spending caps to two years and increase the debt ceiling at least through the 2024 election.
Biden's openness to work requirements enraged progressives.
Biden also said he planned to attend the G-7 in Japan on Wednesday — a trip he previously said he could attend virtually if debt limit talks required him to remain in Washington.
The federal government reached its $31.4 trillion borrowing limit in January, prompting the Treasury to take 'extraordinary measures' to move money around and buy more time for Congress to work out a deal.
Biden has long insisted Congress must present him with a 'clean' debt ceiling bill and can talk about spending cuts after the limit has been raised. McCarthy has long insisted he won't do that — using the debt ceiling as leverage to demand cuts to the federal budget.