Front Porch Blog

What is the debt ceiling, and how could it be used to try to ram through MVP?

If you’re on our email lists, you’ve seen some of the pleas we’ve put out for you to contact lawmakers about efforts by some legislators to use cuts to vital services and environmental regulations as bargaining chips during debt ceiling negotiations.

They want to:

  • gut longstanding environmental protections
  • give handouts to fossil fuel companies
  • attempt to force approval of the Mountain Valley Pipeline
  • make painful budget cuts to programs that help communities impacted by mine and power plant closures
  • repeal last year’s historic investments in fighting climate change.

But what is the debt ceiling, and why can it be used to gain leverage to pass unpopular legislation that otherwise wouldn’t have the necessary votes?

The debt ceiling

The debt ceiling is a limit set in federal law by Congress on how much the U.S. Treasury can borrow to fund government obligations. Debt holders include individuals, pension funds, insurance companies, banks, foreign countries and even the U.S. government itself. Raising the debt ceiling doesn’t create new debt or new spending; it merely authorizes the government to borrow the money needed to balance the budget created by Congress.

Take action to tell Congress — pass a clean debt ceiling bill and don’t sacrifice environmental projects and economic development programs for Appalachian communities.

Raising the ceiling has historically been routine and noncontroversial. Since 1960, Congress has raised or suspended it 78 times, according to the Treasury Department. It has been raised under both Democratic and Republican administrations when Congress was controlled by the same party or by the opposition party.

What’s at stake?

Failing to raise the debt ceiling when necessary has largely been considered unthinkable because the consequences would be so profound. It would mean that the federal government couldn’t pay Social Security and Medicare recipients the benefits they worked all their lives to earn. It would mean cuts to essential services that improve lives across the United States. It would mean 8 million people lose their jobs.

The impact would be felt by everyone in the nation — and beyond.

Most seriously, this failure would force the United States of America to default on its debt obligations for the first time in history. The ramifications, both domestically and internationally, would be catastrophic.

U.S. Treasury debt is the world’s safest asset because the United States has always met its obligations. That helps make the U.S. dollar the world’s main reserve currency. A voluntary default as a result of the failure to increase the debt limit would drive up borrowing costs for the United States, crash the dollar and result in a host of cascading events that would likely drive both the U.S. and global economies into recession.

The stock market would plummet. Millions of jobs would be lost. Interest rates would skyrocket.

Why would anyone risk such drastic impacts?

Unfortunately, this comes down to partisan politics. Republicans control the U.S. House of Representatives while Democrats control the Senate and the presidency. This means both parties need to work together to pass any legislation, including legislation to increase the debt ceiling. When Republicans last controlled both Congress and the presidency under the previous administration, they raised the debt ceiling twice — and in 2019 when Democrats controlled the House, the ceiling was raised once more with Republican votes.

Because the debt ceiling increase is one of only a few bills that must pass Congress this term, Republicans are leveraging the opportunity to accomplish other policy goals that Democrats oppose, such as significant funding cuts to government programs and easing permitting and environmental laws for oil, gas and coal projects. Republicans have tried this before — they used the debt ceiling to coerce negotiations in the same way in 1995, 2011 and 2013, when Republicans controlled all or part of Congress with a Democrat in the White House. Republicans are now demanding unpopular, drastic spending cuts and policy changes to increase the debt ceiling.

Cuts and policy demands in House debt ceiling bill:

This is, in other words, an artificial crisis. It most certainly should not be used as justification to make painful spending cuts that would hurt coal miners, blunt investment in new clean energy jobs and a new economy across Appalachia, attempt to ram through approval of a dangerous and unnecessary pipeline, undo historic progress in investments to lower climate emissions and make dirty fossil fuel projects easier to permit.

Take action to tell Congress — pass a clean debt ceiling bill and don’t sacrifice environmental projects and economic development programs for Appalachian communities.

Dan is Appalachian Voice's Media Specialist. Previously, he worked as an opinion journalist for newspapers in Illinois, West Virginia, Florida and Virginia, and then as a communications consultant for a number of environmental nonprofit organizations.


  1. larry flores says:

    We the people want and need Congress to pass the debt ceiling now! with out any special intrests or hostage negociation. we are following your fighting and will votr accordingly.

Leave a Reply

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.

Facebook Twitter Instagram Youtube