The fight over raising the nation's borrowing limit underscores a reality for Democrats as they are in the midst of their highest stakes moment for President Joe Biden's sweeping legislative agenda: thrusting a potential default into the mix may have devastating consequences.
A mild recession, according to analysts, would likely be the best-case scenario in the event of the US government defaulting on its debts, a limit the country is expected to reach next month and for which Congress must act to increase. The worst case scenario would involve downstream effects of potentially cascading job losses, a shut down in tens of billions in Covid-19 economic recovery aid still set to be delivered, a near-freeze in credit markets and gross domestic product taking a tangible hit that could last for multiple quarters.
"No one would be spared," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told CNN. "It would be such a self-imposed disaster that we wouldn't recover from, all at a time when our role in the world is already being questioned."
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