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© Bloomberg. Kevin McCarthy outside the White House
(Bloomberg) -- Democrats have warned in speeches from the US Capitol and appearances on cable-news shows that the standoff over the debt ceiling threatens to rattle financial markets and wreck the economy.
But if their fundraising appeals are any indication, they also see political benefit to an ongoing drama that, if not resolved, means that the US government won’t be able to pay its debts.
The emails to supporters — some with footnoted primers on economics — have sought to raise both money and alarm.
If Congress doesn’t increase the ceiling by sometime in June, the US risks defaulting on its debts. President Joe Biden and House Speaker Kevin McCarthy held their first talks on the debt limit this week without resolving the standoff.
“I’ll never try to scare you, but I need to be frank,” Senate Majority Leader Chuck Schumer said in his pitch for cash.
He followed that with a section that highlights the challenge of firing up a political base with an arcane economic debate: “What is the debt ceiling?”
Democrats have sent 22 emails highlighting the standoff, in what’s normally a slow period for raising money, according to Pundit Analytics, which tracks emails, Facebook (NASDAQ:META) ads and social-media postings of elected officials and candidates.
The appeals cut across the party spectrum, coming from progressive firebrands Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez as well as moderate senators Sherrod Brown of Ohio and Jon Tester of Montana.
The latter two, both of whom are up for reelection in Republican-leaning states in 2024, have warned supporters that House Republicans would use the debt-ceiling fight to cut popular benefit programs, including Social Security and Medicare.
Republicans have mostly avoided the issue in their fundraising appeals, though Senator Tim Scott of South Carolina has included it in an email to supporters, framing the debate as a fight to rein in government spending.
Democrats are pushing for a no-drama increase to the debt ceiling separate from any discussion of budget cutting. If unresolved, the dispute risks sending financial markets into a steep decline if traders and investors lose faith that Congress will agree to pay for debts the federal government has already incurred.
Unlike with emotionally charged, hot-button issues such as abortion or immigration, many of the emails focus on explaining a complicated Washington procedural fight with profound economic consequences rather than just asking for campaign cash.
Debt Tutorial
“If you’ve been wondering, ‘What’s the debt ceiling? Why is it in the news? And what does it have to do with me?’ – then this email is for you!” reads a Jan. 20 note from the campaign of New York Democrat Ocasio-Cortez.
The message features a Q&A about the debt ceiling, complete with four, hyperlinked footnotes to guide interested readers to additional information. Also included: links for donating money or buying merchandise.
Fellow progressive Representative Rashida Tlaib, a Michigan Democrat, also used a footnote in her message.
Schumer’s Jan. 26 email explains the consequences of the US reaching the end of its credit limit. He warns that not paying the country’s debts would shake the world economy and could lead to a recession.
“But we don’t really know. Because it’s never, ever happened,” he wrote. He closes by arguing that House Republicans are trying to use the debt ceiling fight to “extort cuts to Social Security, Medicare, and more.”
Republicans are more internally divided about how to address the debt ceiling. Some of the most conservative members are spoiling for a big fight, pushing for large spending cuts in exchange for their votes to increase the debt ceiling.
McCarthy has sought to tamp down some of the most inflammatory rhetoric and said he’s confident a deal with Biden can come together.
Some moderate Republicans have privately expressed concern that factions of the party are being too cavalier with the debt ceiling.
Scott, a South Carolina Republican senator mentioned as a potential 2024 presidential candidate, tried to turn the issue against Democrats and their refusal to negotiate budget cuts.
“The Democrats’ plan to ELIMINATE the debt ceiling will be like giving Biden a blank check to spend YOUR MONEY,” Scott said in an email appeal.
©2023 Bloomberg L.P.
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