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Why Does the Debt Ceiling Deal Include a Fossil Fuel Pipeline?
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After a few days of apprehension on behalf of Americans across the country, the United States finally decided to raise its debt ceiling in order to prevent the country from being unable to pay its loans.
The debt ceiling predicament could have impacted millions of Americans if the country were to have defaulted, but instead – the new decision to raise the debt ceiling may have insufferable consequences for climate change on the United States.
What is the debt ceiling in the United States, why did the country decide to raise the debt ceiling, and how could the new deal to prevent the country from a default have an impact on climate change – such as with fossil fuel pipeline projects?
What is the debt ceiling?
The debt ceiling is the term used to refer to the limit on the amount of money that the United States can borrow. This term and concept was created back in 1917 under the Second Liberty Bond Act, which is commonly referred to as the debt limit or the statutory debt limit. In today’s political dialogue, this concept is referred to as the debt ceiling.
👉 Think of the debt ceiling similar to the limit on someone’s credit card: there is only a certain amount of money that someone can borrow on a line of credit before their credit card is rejected and they can no longer make purchases that do not directly debit their bank account. The same goes for the debt ceiling in the United States.
If the United States is ever unable or unwilling to raise the debt ceiling, the country would have no choice but to default – which means the U.S. essentially admits they are unable to pay their bills and do not have the financial resources to do so on time.
👉 The U.S. have never defaulted, not once, but with this most recent debt ceiling crisis – many were fearful the U.S. would have no other choice but to default. As a result of the United States remaining adamant on paying their bills on time, the debt ceiling has been raised multiple times over the years to ensure Americans do not suffer the consequences of a default.
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What are the pros and cons of the debt ceiling?
Although raising the debt ceiling is bound to have other implications within Congress, there are numerous as to why it proves advantageous for the United States. For instance, the debt ceiling allows the U.S. Treasury to continue issuing bonds without an approval each time – meaning the debt ceiling can be fiscally efficacious for the country. The debt ceiling also ensures that the United States keeps their finances organized, helps to fund various federal programs, and can help the government to financially support programs like social security and medicare.
However, that being said – there are also downsides to the debt ceiling. The most infamously negative component to the debt ceiling is that it can be raised with ease (just as it was done so recently) – which can motivate irresponsible financial behavior.
👉 Refer back the analogy of the debt ceiling functioning a lot like a credit card – someone who has no money in their bank account, but has a credit card, may be lead to believe they can make extravagant purchases with no consequences. This couldn’t be further from the truth, as the user will eventually have to pay interest on everything they bought – as will the U.S. no matter how many times they raise the debt ceiling.
In addition to this, the debt ceiling lowers credit ratings and creates contention whether the debt ceiling is morally the right thing to do.
Why did the U.S. decide to raise the debt ceiling?
It doesn’t come as a surprise to many that the United States decided to raise the debt ceiling, as if the U.S. were to have capitulated to a default – that Americans and governments around the world could have been exposed to new financial problems and even entire government shutdowns. Typically, these disruptions are caused when conflict arises between the White House and Congress – and where there are disagreements on how to move forward. However, raising the debt ceiling isn’t guaranteed to resolve other issues either – as it could create trouble in congress. This is due to the fact that Republicans were wary of raising the debt ceiling limit unless Democrats got serious about making budget cuts – to ensure the same debt ceiling crisis isn’t met again in a few years.
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Still, the decision to raise the debt ceiling was large in part to prevent several negative repercussions. For instance, if the debt ceiling wouldn’t have been raised: there would’ve been higher interest rates for bonds, mortgages, and credit card loans – demonstrating how choosing a default over raising the debt to be an especially worrisome event seeing as of 2021, 84% Americans make use of a credit card.
👉 Ultimately, the U.S. decided to raise the debt ceiling to prevent the nation from being unable to pay its bills on time and to protect from the potential negative financial consequences. According to Biden, the country was close to an economic collapse – making the deal necessary even if it didn’t satisfy everyone.
However, raising the debt ceiling has put pressure for there to be budget cuts on behalf of Democrats – meaning the debt ceiling deal could impact current climate change programs being funded by the government.
Where does the debt ceiling deal make cuts in current funding?
The debt ceiling may have reached an agreement, but the deal is likely to have an impact on the current climate goals implemented by the United States – from ongoing and potential programs to reduce greenhouse gas emissions to pipeline deals.
This is due to the fact that in order to have the debt ceiling passed, the country will be forced to make budget cuts – many of which could impact existing or future plans to fight against climate change. Recent estimates show that the U.S. is expected to decrease their spending by $55 billion in 2024, and by a whopping $81 billion by 2025. One of the ways the debt ceiling deal could impact Americans is by phasing out who qualifies for food stamps – putting hundreds of thousands of Americans at risk of starvation.
The problem with much of the debt ceiling deal is that it doesn’t satisfy either Republicans or Democrats with the cuts they want to make to reduce the country from further debt. Republicans were keen on taking bigger spending cuts on various work requirements, and also wanted to remove the billions of dollars invested by Biden to transition to the use of clean energy and fight against climate change. On the other hand, Biden was determined to raise taxes for the wealthy to help reduce the costs Americans pay for prescription drugs – even on Medicare.
While neither of these made it into the debt ceiling deal, healthcare such as medicare is set to be impacted as a result of raising the debt ceiling – which is an already a growing problem due to climate change.
Other areas of funding that will be cut as a result of the debt ceiling deal will be with student loans and even the I.R.S. – both of which will continue to put Americans under financial stress. However, the avenue where the debt ceiling deal is most concerning is when it comes to climate change programs and approving of potential projects that could harm the environment – all for the sake of pulling the United States out of debt.
How does the debt ceiling deal impact fossil fuel pipeline projects and other climate change endeavors?
There are a lot of things in the new debt ceiling deal that will have Americans worried, but one of the most concerning facets of the debt ceiling deal is the tacit implication that there will be changes how climate goals are approved of and executed in the country.
An example of this is with the Mountain Valley Pipeline, where Republicans were able to integrate the pipeline project into the debt ceiling deal. This was done by pressuring Biden and pontificating that the Mountain Valley Pipeline Project would be critical for energy infrastructure and help to lower the energy costs in multiple states: including Virgina and North and South Carolina. However, this was done with political persuasion in a moment of crisis – and the pipeline project may not be moving forward so quickly if it weren’t for the debt ceiling crisis.
In addition to other federal programs, such as ones geared towards fighting against climate change, which are in danger of facing budget cuts – approving of projects like these in timely manners, while could help the U.S. acquire immediate cash, could deter the country from meeting its climate goals.
👉 The debt ceiling deal approved of the Mountain Valley Pipeline project with the belief it will help support the energy crisis in addition to reducing energy bills – both of which are strong policies demonstrated in the Biden administration. However, the political language was toyed with to convince Democrats that the pipeline project will be more beneficial than it actually will be.
Ultimately, the U.S. approved of massive cuts for common federal spending programs, much of which is intended to help struggling Americans – in order to ensure that the U.S. can pay their bills on time and prevent the need to raise the debt ceiling again. While this makes sense, as a default in the United States could put the country and even other nations in financial peril – it is worth questioning why certain projects are being approved of to raise funds quickly, especially when investing in clean energy projects could reap greater financial benefits overtime than fossil fuel pipeline projects will.
The recent debt ceiling predicament in the U.S. is a reminder that when times get tough, any opportunity that presents itself has a better chance of seeing the light of day – even if it isn’t in line with our moral values. The debt ceiling crisis may be resolved, but we may have yet to see the repercussions of the United States’s economic distress.
What about Greenly?
If reading this article about how the debt ceiling will help accentuate the use of fossil fuel and production of pimples has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!
It can be hard to keep track of all of the news happening around the world, such as how the economy’s of countries impact the fight against change – but don’t worry, Greenly is here to keep you up to date on all of the latest climate news.
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.
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