It’s time to start worrying about the debt ceiling.

The federal government is approaching its credit limit, above which the Treasury will not be able to pay all of its bills.

The consequences could be truly catastrophic, a global financial crash, or just damaging: a rise in interest rates, a plummeting stock market, and a more likely recession.

Last week, Treasury Secretary Janet L. Yellen said the X date, the day the money runs out, could arrive as early as June 1.

The problem, of course, is politics.

President Biden wants Congress to lift the debt ceiling without any significant conditions, just as it did three times when President Trump was in the White House. But the new Republican majority in the House wants to force Biden to accept big cuts and cut some of his favorite shows.

“They are trying to hold blame hostage,” Biden lamented Friday.

Republicans have used the

H

– word too.

It’s a hostage worth ransomed, Senate

Republican minority

Leader Mitch McConnell (R-Ky.) said next

a previous to earlier

debt crisis.

Both sides insist they are determined to avoid a catastrophic bankruptcy. But playing chickens over the debt ceiling is a bit like the nuclear equilibrium of terror: Neither side wants a conflagration, but they can easily stumble into it.

Political polarization makes the problem more difficult to solve. House Speaker Kevin McCarthy (R-Bakersfield) has his job thanks to the hardline Freedom Caucus

which that

has long opposed raising the debt ceiling under any circumstances.

In theory, there are plenty of ways to solve this problem. The debt ceiling has been raised seven times in the past decade, but most require both sides to make painful concessions.

The fight against the debt ceiling is like a kidney stone. You pass it; it’s just a matter of how painful it will be, said Amy Walter, editor of the Cook Political Report, quoting a veteran lobbyist.

Last month, Republicans in the House agreed on an opening bid: They offered to lift the debt ceiling for a year if Democrats agree not to

–

defense spending (excluding Social Security and Medicare) by an estimated 22%, an extraordinarily steep reduction.

Biden has offered to negotiate cuts, but says he will not negotiate as long as the GOP holds the debt ceiling hostage. However, he has little choice as the Republicans control the House and

come up with

almost aided by the Senate.

Talks start Tuesday

[May 9]

at the White House. Neither side expected

a

quick deal.

Biden wants to maintain the ambitious domestic programs he has been running over the past two years, when Democrats held majorities in both the House and Senate. Republicans want to scrap many of them

they those programs

, including clean energy, student loan exemptions, and expansion of Medicaid. The GOP also wants to cut funding for the Internal Revenue Service, which would have the perverse effect of widening the federal deficit.

There are several possible solutions.

Republicans could agree to raise the debt ceiling in exchange for serious budget negotiations. But the Freedom Caucus has already rejected that outcome, and if its members walk out, McCarthy could lose the speakership.

The two sides could split the difference: raise the debt limit once budget negotiations are complete

way, starting with an agreement on the overall level of expenditure. but it

would like

It will still be difficult to reach an agreement that can be approved by both the Democrat-led Senate and the Republican-led House.

If talks with McCarthy stall, Biden could try to strike a deal with McConnell. That’s what happened in 2011, when then-Vice President Biden and the Senate Republican leader worked out a compromise.

But McConnell has said McCarthy and House Republicans should lead the way.

Likely, the two sides could decide they need more time and lift the debt ceiling as they continue negotiations.

With a presidential campaign under

way, these maneuvers are also about who is to blame when things go wrong.

Both sides claim that the public is on their side. They are both half right. Republicans point out that most voters do not want to increase the national debt, and they are right. But Democrats point out that most voters don’t like the deep cuts the GOP has proposed either.

A Washington Post-ABC News poll last week found a remarkably symmetrical response

: , of

78% of Democrats say

scary

they would blame the Republicans if the government did not pay its debt, and 78% of Republicans say

scary

they would blame Biden. Independents were divided, but slightly more inclined to blame the GOP.

One missing factor: Wall Street and corporate have not weighed in. They seem to assume it will all work out, a Democratic aide told me.

That was true of past debt ceiling fights, three during the Trump administration and no less than six during the Obama administration.

But this is a more polarized era, with more members of Congress, especially on the right, coming to power by refusing to compromise.

Resolving the deadlock may depend on McCarthy’s wisdom and courage, two commodities that have not been reliably measured.

Hi

has little experience as a two-pronged dealmaker.

The chance of missteps and miscalculations is greater.

That makes the chance of a catastrophic default or a harmful near-default much greater than before.