It’s déjà vu all over again. There’s a showdown in Congress about raising the debt ceiling. Republicans in the House want to use the debt ceiling as leverage to pass cuts in search of a balanced budget. Some Republicans have suggested abolishing the IRS and no longer collecting taxes. Instead, they propose funding the government with a national sales tax of up to 30%. And, will they actually say out loud that they support reductions to cherished social programs like Social Security and Medicare? We have about five months to find out.

That political fight is on-going. Last Thursday, the Treasury began taking what it calls “extraordinary measures” to avoid defaulting on US debt. Those measures will run out in June.

In 2011, the mere fact that Congress bickered about it for several weeks was enough for the stock market to shudder. And, the US credit rating was downgraded for the first time.

The Biden administration has said that raising the debt ceiling is a non-negotiable, basic duty of Congress. Permission to bring the country to the brink of default, or perhaps into actual default, was one of the conditions Speaker Kevin McCarthy had to agree to in order to be elected Speaker.

Tom's first guest today is Kathleen Day, an author, journalist and full-time lecturer at the Johns Hopkins Carey School of Business.

She joins us on Zoom to explain just what's at stake in the debt limit debate.