Raising the federal debt ceiling has always been a distasteful but necessary thing. As Linda Goold, NAR’s director for tax policy, explained of Congress, “They hold their noses, make speeches… and pass it."
But this year things could be different. First, there are a number of first-time representatives who may not realize the implications of not passing a bill. Second, for the first time, Republican lawmakers are trying to attach other, controversial legislation to the debt-ceiling vote — such as cuts to Social Security, Medicare, and Medicaid, as well as abortion restrictions and environmental laws. As Goold explained, that turns what has always been quick (if distasteful) vote into yet another full-blown battle.
The implications for real estate are significant. Attacks on the mortgage interest deduction could intensify. The future of Fannie and Freddie would remain in doubt if the government shut down. And the effect on the economy would be disastrous, because it could mean the country would default on its debt.
What would happen? Goold herself explains in a six-minute video from NAR. Check it out so you’ll know what’s at stake.