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U.S. Debt Crisis: Discussion Guide

A worldwide economic catastrophe was averted as a bipartisan group of senators agreed to a last-minute plan to raise the debt ceiling and end the 16-day U.S. government shutdown.

SReid Obamaenate Majority Leader Harry Reid announced the deal only hours before the government was set to default on the national debt. Had an agreement not been reached, the United States would have defaulted on the national debt for the first time since the 1970s and triggered an economic crisis that experts claim would have thrust the world into a crippling recession.

According to NBC News, the plan, crafted by Reid and Senate Minority Leader Mitch McConnell, reinstates government spending through mid-January 2014 and extends the debt limit until February. It also directs lawmakers to come up with a long-term fiscal solution by December 13, 2013. In a Democratic concession, the plan would institute stricter income verifications for the government subsidies contained in the Affordable Care Act.

The plan brings to an end one of the most fiercely fought budget battles in U.S. history. The ideological differences between Democrats and Republicans on the matter were matched only by the ideological differences within the GOP itself. These divisions resulted in the first governmental shutdown since the 1990s and a near-default on the national debt. 

A prominent sticking point with the budget negotiations was the Affordable Care Act. By including in their budget legislation a stipulation that would have defunded the law, House Republicans used the budget standoff as an attempt to nullify “Obamacare.” Senate Democrats and President Obama considered these proposals unacceptable, and the political wrangling continued until Senate Republicans agreed to a deal with their Democratic counterparts. That agreement forced the hand of House Republicans, who already were split on the issue. 

This is the second time in as many years that the U.S. has flirted with defaulting on the national debt. In 2011, the government came close to defaulting, as Democrats and Republicans sparred over raising the debt ceiling before passing a measure. Subsequently, Standard & Poor’s, one of the major credit rating agencies, downgraded the U.S. credit rating from AAA to AA+, putting the country below the United Kingdom and Australia and on par with countries such as Belgium. S&P cited two major reasons for the downgrade: “the nation's fiscal path and its broken political system.” While the U.S. regained its AAA status several months later, the longer-term effect of America’s more recent budget woes remains to be seen.

 

Student Discussion Questions

  1. Share your thoughts on the legislative strategy of attaching special stipulations to large, important bills as a way of “forcing the hand” of the opposing political party.
  2. What do you think of the way legislators handled the budget crisis? If you had a chance to speak to legislators, what would you have said? If you were a legislator, how would you have tried to resolve the disagreement?
  3. As part of the agreement to end the government shutdown, Democrats agreed to make what changes in the Affordable Care Act?
  4. Do you agree with the often-stated opinion that the United States' political system is "broken"?
  5. How did the rest of the world view the United States’ October 2013 government shutdown and associated budget issues?
  6. A recent topic of national conversation has been the growing division between more conservative “Tea Party” Republicans (those who most opposed the Affordable Care Act) and more moderate members of the GOP. About what do these sides disagree?


Related resources

In addition, the following resources can help teachers explore with students the issues surrounding the ongoing debt debate in Washington.

 

The Affordable Care Act: A Discussion Guide
EducationWorld examines the law known as “Obamacare,” offers a breakdown of political objections to it, and discusses how it compares to healthcare legislation in other countries. A list of student discussion questions is included.

Federal Debt Basics
This guide from the U.S. Government Accountability Office offers a basic primer on the ins and outs of federal debt. High-school students should be able to grasp the concepts covered here.

CNN Student News
This edition of Student News covered the debt ceiling issue for middle- and high-schoolers. 

 


Article by Jason Tomaszewski, EducationWorld Associate Editor
Education World
Copyright © 2013 Education World

 

 

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