And now, a message from Google. The spirit of innovation is deeply ingrained in America,

and Google is helping Americans innovate in ways both big and small. Central Texas Regional Mobility

Authority is using Google AI to create smarter tolling systems and improve traffic flow for Texans.

This is a new era of American Innovation. Find out more at G.com slash American Innovation. Good morning. I'm Anna Palmer and

welcome to The Daily Punch. Brought to by Punch Bowl News. It is Friday, January 27th,

2023. TGIF. Let's get into the mix. Here are your Washington headlines of the day.

Number one, we've got the latest on the debt limit. Number two, the slow roll of the Senate. And number three, a new line from House Republicans, the Biden administration, treat us the same as Democrats.

All right, let's get into it.

We are leading Punchable News AM's newsletter this morning with a look at how the Republican chair of the House Budget Committee and how he is adamant that the U.S. government won't default on its debt even in the event of a debt-sealing breach.

GOP representative Jody Arrington from Texas told us Thursday that the U.S. government has, quote, unquote,

never defaulted on its debt. We won't default now, he added.

So sure. Okay. Well, that's great. Good line. But hypothetically, what if we do run out of the fiscal clock and breach the limit?

Arrington pointed to the Constitution and argued in terms of our creditors, they will be made whole. We will make our payments.

So what is Errington exactly talking about?

Washington has long wondered what Treasury would do in the event of a debt default.

Some have pointed to Section 4 of the 14th Amendment, which states that the validity of the public debt of the United States shall not be questioned.

Of course, the core concern behind a federal debt ceiling breach is the unpredictability of the event itself. Let's step back here a little bit. At a minimum,

financial markets will flip out. Government functions such as social security payments,

food programs, military pay for service members might stop. The potential

fallout here is far, far worse than a government shutdown. It's also unusual, perhaps unprecedented

to hear a budget committee chair make such an argument, but Republicans have quietly downplayed

the impact of a default for years.

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