Explainer-Shutdown? Default? Washington's risky new debt ceiling standoff

Explainer-Shutdown? Default? Washington's risky new debt ceiling standoff

By Andy Sullivan WASHINGTON (Reuters) - Partisan brinksmanship in the U.S. Congress has made government shutdowns seem a routine part of governing in the past decade,

By Andy Sullivan WASHINGTON (Reuters) - Partisan brinksmanship in the U.S. Congress has made government shutdowns seem a routine part of governing in the past decade,

but the current standoff in Washington over raising the $31.4 trillion federal debt ceiling is significantly riskier. WHAT IS A GOVERNMENT SHUTDOWN? Congress is

but the current standoff in Washington over raising the $31.4 trillion federal debt ceiling is significantly riskier. WHAT IS A GOVERNMENT SHUTDOWN? Congress is

supposed to pass detailed spending legislation for each fiscal year, which begins on Oct. 1, or temporary extensions to keep the government operating. If these bills don't

supposed to pass detailed spending legislation for each fiscal year, which begins on Oct. 1, or temporary extensions to keep the government operating. If these bills don't

get passed, agencies like the Defense Department and the Internal Revenue Service don't get the money they need to operate and must shut down or scale back their work. That

get passed, agencies like the Defense Department and the Internal Revenue Service don't get the money they need to operate and must shut down or scale back their work. That

has happened three times in the past 10 years. A battle over healthcare spending led to a 16-day shutdown in October 2013, while disputes over immigration led to a three-day

has happened three times in the past 10 years. A battle over healthcare spending led to a 16-day shutdown in October 2013, while disputes over immigration led to a three-day

shutdown in January 2018 and a 35-day shutdown between December 2018 and January 2019. According to the Congressional Budget Office, the 2018-2019 shutdown reduced economic

shutdown in January 2018 and a 35-day shutdown between December 2018 and January 2019. According to the Congressional Budget Office, the 2018-2019 shutdown reduced economic

activity by about $11 billion while it was underway, but much of that lost growth was recovered when government activity resumed. Overall, the shutdown cost the economy about $3

activity by about $11 billion while it was underway, but much of that lost growth was recovered when government activity resumed. Overall, the shutdown cost the economy about $3

billion, equal to 0.02% of GDP, CBO found. WHAT IS THE DEBT CEILING? Congress has another important fiscal function: ensuring that the government can pay its bills,

billion, equal to 0.02% of GDP, CBO found. WHAT IS THE DEBT CEILING? Congress has another important fiscal function: ensuring that the government can pay its bills,

including for spending that lawmakers have already agreed to. Unlike most other countries, the United States sets a hard limit on the amount of money it can borrow. As a

including for spending that lawmakers have already agreed to. Unlike most other countries, the United States sets a hard limit on the amount of money it can borrow. As a

result, Congress must periodically raise that cap because the government typically spends more money than it collects each year, adding to the national debt.

result, Congress must periodically raise that cap because the government typically spends more money than it collects each year, adding to the national debt.