The debt ceiling fight continues in Washington, more than a week after the U.S. hit its legislated debt limit of $31.4 trillion.
“The Treasury Department has hit the federal borrowing limit at $31.4 trillion, and they’re going to be able to use cash-management techniques to be able to extend what we call the ‘X date’ of when they’re going to ask for the debt limit to actually be raised, somewhere until later in the summer,” says Matthew Dickerson, senior adviser on budget policy at The Heritage Foundation. (The Daily Signal is the news outlet of The Heritage Foundation.)
“So, the negotiations are starting between Congress and the White House to figure out what are the spending reforms, what are the pro-growth policies that we’re going to implement and pair that with the debt limit increase so that we can put the country on a path to a more prosperous future,” he said.
Dickerson joins “The Daily Signal Podcast” to further discuss the latest on the debt ceiling debate, whether the U.S. has ever defaulted on its debt before, and a bill recently introduced by 43 House Democrats to eliminate the debt limit entirely.
Listen to the podcast below or read the lightly edited transcript:
Samantha Aschieris: Matthew Dickerson is joining today’s show. He is a senior policy adviser of budget policy in the Grover M. Hermann Center for the Federal Budget here at The Heritage Foundation. Matt, thanks so much for joining us.
Matt Dickerson: Thanks for having me on.
Aschieris: Yeah, of course. Now, here in Washington, the debt ceiling fight continues. America has already reached its debt limit of $31.4 trillion, and that was on Jan. 19. So, Matt, first and foremost, what’s the latest on this?
Dickerson: That’s right. The Treasury Department has hit the federal borrowing limit at $31.4 trillion. And they’re going to be able to use cash-management techniques to be able to extend what we call the “X date” of when they’re going to ask for the debt limit to actually be raised, somewhere until later in the summer.
So the negotiations are starting between Congress and the White House to figure out what are the spending reforms, what are the pro-growth policies that we’re going to implement and pair that with the debt limit increase so that we can put the country on a path to a more prosperous future.
Aschieris: And just speaking of the White House, my colleague, Virginia Allen, reports that they have said that President Joe Biden won’t negotiate over conditions for raising the national debt ceiling. On Wednesday, though, Sen. Rand Paul of Kentucky said the president absolutely will negotiate. So what are your thoughts on this? What’s at play here?
Dickerson: Absolutely. Just like everything in politics, this is a negotiation. An increase in the debt limit has to go through the House, the Senate, and get signed into law by the president. A bill is not going to be able to get passed unless it’s paired with some sort of spending reforms, as it has been going back for four decades on negotiations about the debt limit. So there will be a negotiation.
Vice President Biden, when he was in the White House, engaged in very significant negotiations with Speaker [John] Boehner in 2011, and I think a similar path is going to follow now.
Aschieris: We have some audio also from Virginia of remarks from Sen. Ted Cruz at a Wednesday press conference with five other GOP senators, and we’re going to go ahead and play that for you now.
Sen. Ted Cruz: There is one principle person in this town that is talking about a default in the debt, and that is Joe Biden. Joe Biden wants to threaten the default in the debt. He wants to scare the markets. And frankly, he’s counting on y’all.
He’s counting on the press corps just to repeat his talking points. He’s counting on the press corps just to say, “Those crazy Republicans want to default on the debt.” That is false. And if you write that in your stories, you are simply repeating partisan talking points from the White House. Historically, the debt ceiling has proven incredibly effective.
Aschieris: So two things from this I want to discuss. First, when Sen. Cruz talks about defaulting on the debt, what does that exactly mean? And what would the consequences be if this were to happen?
Dickerson: Yeah, so, what the senator is talking about is, if the Treasury doesn’t pay back the principle and interest on loans on Treasury bonds and bills—and frankly, that’s not going to happen. The Treasury is going to be collecting record revenues this year, and the Treasury has the ability to prioritize and pay its obligations for debt and the principle and interest on our debt payments. So there’s not going to be a default on our debt.
The Treasury may have to get to a situation, if the debt limit isn’t raised, where we’re simply not spending more than we take in. And at that point, other spending would not go out the door on time as it’s been promised, but we’re not going to default on our debt obligations.
Aschieris: Yeah. Has that ever happened before?
Dickerson: Not in a significant way. Actually, one time back in the ’70s, there was a computer error and some of it didn’t get paid. And there wasn’t a big, big market meltdown. It has happened before, but it’s not something that we want to have happen.
The global financial markets are built on Treasury debt. It’s a very safe asset because the United States is going to pay its obligations. But what we need to do is get to a situation where our federal budget is sustainable and so we’re not issuing debt that we’re not going to be able to meet our promises to pay it back.
Aschieris: Yeah. And the second thing that Sen. Cruz talks about that I want to get your thoughts on is the role of the media and the reporters who are covering the debt ceiling debate. What are your thoughts on what Sen. Cruz had to say about that?
Dickerson: I think it’s interesting, right? A lot of reporters may have not been around in the negotiations that were taking place in 2011 where both sides were talking.
President [Barack] Obama, Vice President Biden was negotiating with congressional Republicans, and they got to a deal that put us on a more sustainable fiscal path. And that happened in the ’90s. That happened in the ’80s on a bipartisan basis. And so there’s always been a negotiation about the debt limit. It’s served as a tool to put the country on a more sustainable fiscal path for decades, and that’s what we need to do this year.
Aschieris: Now, Matt, I also want to get your thoughts on something that we saw from House Democrats recently. They introduced a bill that would essentially do away with the debt ceiling entirely and allow Congress to borrow the money it needed to pay its bills. So first and foremost, what’s this all about?
Dickerson: Yeah, I think that just goes to show how radical the Left is, right? The debt limit is an indispensable tool that protects taxpayers. That’s why it was implemented in the first place. The Left, on the other hand, when we reached the $31.4 trillion debt limit, which should be a crazy wake-up call of how much we’re spending and how much is going out the door, their solution is to get rid of the spending cap and then continue spending, continue borrowing, continue the Federal Reserve’s money printing. That’s only going to push up inflationary pressures and hurt American families. And I think that’s just a crazy, crazy thing that we should be pointing out and doing the opposite.
Aschieris: Yeah, I mean, do Democrats really believe the government can just permanently borrow more money when everyday Americans can’t?
Dickerson: That seems to be their viewpoint, right? If you’ve seen their crazy economic theories of Modern Monetary Theory, which the government has been putting into practice over the last couple of years, and that’s resulted in inflation that we haven’t seen in this country in four decades. And so it’s totally a debunked economic theory.
And what we have seen is when government spending is controlled, when we have regulations that are restricted in a smart tax code, we have economic prosperity that’s broadly felt in this country. And that’s what we need to go back to.
Aschieris: Well, Matt, thanks so much for joining the show today. I always appreciate your insight. We’ll definitely have you back on as this debt ceiling debate continues. Thanks so much.
Dickerson: Great. Thank you.
Article cross-posted from Daily Signal.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
