Looming Debt Limit Crisis
Floor Speech
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Mr. JACKSON of Illinois. Madam Speaker, I rise today in the Chamber of this hallowed institution to raise my voice, echoing the deep concerns that reverberate from the hardworking, dedicated, and patriotic citizens of this great Nation.
Specifically, I stand before you to amplify the anxieties of Black Americans, who for far too long have been subjected to the harshest winds of economic hardship.
Today, we find ourselves on the precipice of a financial abyss. I must underscore the severe impact that the failure to lift the debt ceiling would have on the lives and livelihoods of Black Americans and their families across this country.
Our Nation stands on the brink of a financial crisis, our coffers threatening to run dry as soon as June 1. The hard truth, my colleagues, is that we have already reached our debt limit of $31.4 trillion, yet we have not reached an agreement to raise the ceiling. This failure to act is not just a legislative oversight. It threatens the very fabric of our economy, our society, and, most importantly, our people's lives.
The debt ceiling, for those unfamiliar, is the total amount the Federal Government can borrow to meet existing obligations, ranging from Medicare and Social Security to loan repayments. If we fail to raise this debt limit, we risk default on our national loans, leading to a catastrophic fallout for our credit rating and potentially triggering a deep recession. The ripple effect of such a financial debacle would not only be felt within our borders but would also potentially destabilize the global economy.
Now, you may ask, why should Black Americans be particularly concerned?
The answer lies in the cruel and persistent reality of our socioeconomic landscape. A deep recession does not impact all demographics equally. Black Americans are typically among the first to feel the brunt of economic downturns, often being laid off first and, tragically, the last to recover.
A default would strike an even harsher blow to the backbone of Black communities: our elderly. As of 2017, 35 percent of elderly married Black couples and 58 percent of unmarried Black older adults depend on Social Security for 90 percent or more of their income. If the debt ceiling is not lifted, and we default on our obligations, the fallout would disproportionately harm the Black community and shred the already thin safety net many rely upon.
The current crisis we face extends beyond Social Security, Medicare, and essential Federal services. It reaches into the realm of higher education, ensnaring young Black Americans in the tightening grip of student loan debt.
The bill that my colleagues across the aisle have brought to the floor would effectively dismantle President Biden's student loan debt relief, a plan that promises to lift the yoke of debt from those earning less than $125,000 annually, forgiving up to $10,000 in student loan debt, and even more for lower-income borrowers. The Republican argument that this plan misuses taxpayer dollars to pardon the debts of some Americans is not just misguided, it is a grievous misrepresentation of the realities faced by our young citizens, particularly those of color.
Black college graduates bear the brunt of this student debt crisis. Over 80 percent of Black bachelor's degree recipients are shackled with an average debt of over $34,000, according to The Institute for College Access and Success. Not only are they borrowing more, but they are also defaulting at higher rates because they are not able to go into higher- paying jobs. These are not merely statistics, Madam Speaker. These are the dreams of our youth being crushed under the weight of financial obligations.
In the shadow of this impending catastrophe, we ask: Why has Congress not acted?
It is the same answer that has plagued institutions for centuries: politics.
While the Republican-controlled House has passed a bill to raise the debt limit, it is fraught with spending cuts and new work requirements for those receiving government benefits, making it an untenable solution.
Over 85 percent of those persons who are receiving these benefits now have an elderly person or child or are unable to find public or private transportation to meet these work requirements. We must think of the whole continuum in order to fix the problem and not lay blame on the backs of the poor.
During the Presidency of Donald Trump, Congress raised the debt limit three times--in 2017, 2018, and 2019--with bipartisan support, and no precondition on budget cuts. Since 1959, the debt ceiling has been raised 89 times. A financial crisis was averted because both sides of the aisle recognized the need to act swiftly and responsibly to protect the interests of the American people.
Now, as we face a similar situation, the Biden-Harris administration has drawn a clear line in the sand. They have rightly insisted that fiscal budgets and the debt ceiling should be separate issues. Again, fiscal budgets and the debt ceiling should be separate issues. The former is a debate about the future. The latter is a commitment to paying our bills for debts we have already incurred. Mixing these two distinct aspects would be akin to confusing our aspirations with our responsibilities.
A default would wreak havoc on Federal services that Black and Brown communities disproportionately rely upon, such as food assistance and Social Security. It would cause the government to prioritize debt payments over the well-being of its citizens, leading to a potential halt on these critical services. The impacts of a default are largely unknown and could be far-reaching, potentially exacerbating existing racial disparities in healthcare, veteran services, and the labor market.
A default would also have a chilling effect on consumer borrowing costs, with interest rates likely to skyrocket for home, auto, and personal loans. Furthermore, the increased credit risk of the Federal Government could significantly hinder credit access for communities of color, who are already more likely to have weaker credit profiles and also the history of redlining.
Our Nation is at a crossroads. We cannot allow political brinkmanship to lead us into an economic downturn that would disproportionately devastate our most vulnerable communities. A failure to lift the debt ceiling is not just an economic misstep, it is a failure of our collective moral responsibilities to all Americans, especially those who have historically been marginalized and disadvantaged.
Black unemployment has been decreasing, and we have made strides toward a stronger, more equitable economy. Yet, if a recession were to happen due to our failure to raise the debt limit, the unemployment rate for Black Americans would rise again, faster than for other demographics. This potential economic downturn threatens to wipe away the progress we have made and plunge us back into inequality and hardship.
We must not allow a crisis of our own making to unravel the hard- earned progress of our people. We must raise the debt ceiling, not just because it is economically prudent, but because it is morally right.
The dignity and welfare of our people, especially Black families who have far too long borne the brunt of economic hardship, hang in the balance. Let us act not out of fear but out of hope; not out of division but out of unity; and not out of despair but out of the belief in the promise of a more equitable and prosperous America for all.
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