Congressional leaders and President Biden continue negotiations to break through a deadlock over spending priorities and policy changes demanded by House Republicans over the debt ceiling, as time runs out before a June 1 government default.
The IBEW urges Congress to lift the U.S. debt limit as the high-stakes standoff threatens to upend the economy only days before the federal government runs out of money.
Failing to suspend or increase the debt limit would have dire effects on IBEW members’ livelihoods and all working Americans, IBEW President Kenneth W. Cooper said in a letter to members of Congress in which he detailed the catastrophic outcomes for IBEW members.
The jobs of IBEW members, like most Americans, are premised on market certainty, which includes the federal government upholding its debt obligations, Cooper said. Therefore, in addition to shrinking IBEW members’ pensions and 401(k) accounts, failing to raise the debt limit could create significant economic fallout, costing IBEW jobs and causing undue financial harm to members and their loved ones. While the stalemate continues, the IBEW Government Affairs is reiterating this message.
President Biden is holding the line against proposed spending cuts he has characterized as unacceptable.
Cooper also said that “failure to lift or suspend the debt limit would likely imperil critical federal obligations, including Social Security and Medicare payments, funding for infrastructure, servicemember salaries and more.”
The U.S. hit its debt ceiling in January, and the Treasury Department has taken extraordinary measures to avoid default.
Since 1960, Congress has acted 78 times to raise, extend, or revise the definition of the debt limit. This occurred 49 times under Republican presidents and 29 times under Democratic presidents, the Treasury Department says. If Congress does not do so, U.S. Treasury Secretary Janet Yellen said that the federal government would begin to default on its financial obligations on June 1.
The Republican-led House and Democrat-controlled Senate must agree on legislation increasing the debt limit by the end of May. To become law, it also needs to be signed by President Biden.
In his letter, Cooper said that the U.S. defaulting on its debt would cost the economy up to 6 million jobs, wipe out as much as $15 trillion in household wealth and send the unemployment rate surging to 9 percent.
“Playing politics and gambling with the livelihoods of American workers is irresponsible,” Cooper said. “I urge Congress to immediately increase or suspend the debt limit and avoid significant and irreparable damage to hard-working American families.”
A debt limit increase would allow the government to finance its existing legal obligations that Congresses and presidents of both parties have made in the past. The U.S. has never defaulted on its legal obligations, and doing so would result in economic catastrophe, the Treasury Department said.
In April, the House passed the Limit, Save and Grow Act that would, in part, raise the debt limit while rescinding tax credits meant to boost labor standards and union employment in the renewable energy sector, jeopardizing multiemployer pension benefits, slashing funding for veterans’ health care and wiping out food assistance to Medicaid recipients. President Biden has vowed to veto it.
Meanwhile, Democrats are circulating legislation that would trigger a debt ceiling vote if it reaches the 218-signature threshold. This procedural move, a discharge petition, is currently five votes shy of 218.
