Every few years, Washington panics as our nation inches closer and closer to the “debt ceiling” — the statutory limit on how much the Department of the Treasury can borrow before it is forced to default on our nation’s loans. Every time, Congress raises the ceiling, allowing us to take on more debt and finance our drunken spending.

It’s that time again: the Treasury Department forecasts that they will exhaust “extraordinary measures” and be unable to pay our nation’s bills sometime this summer. The effects of a default could be catastrophic — the White House Council of Economic Advisors described a doomsday scenario in which the stock market crashes, interest rates skyrocket and nearly all federal benefit payments are halted.

A debt ceiling increase is something close to must-pass legislation. Yet, it is also that rarest of Washington phenomena — an opportunity for the voices of deficit hawks to cut through the din of the cash printer. They are voices that need to be heard: years of reckless spending have put us on the road to fiscal calamity. Over the next 30 years, the Congressional Budget Office (CBO) projects more than $100 trillion in federal deficits, bringing our national debt to nearly twice our GDP in even the rosiest interest rate scenario. Congress has two choices. It can take the first step down the road to fiscal stability by pairing the debt limit increase with meaningful spending cuts, as it has tried to do numerous times over the last several decades. Or, it can keep on whistling past the graveyard, waiting to act until the fiscal crisis is upon us.

These projected deficits are driven by Medicare and Social Security: the CBO finds that of the $104 trillion 30-year shortfall, $101 trillion comes from those two programs. An aging American population requires us to rethink the nature of our social safety net for the elderly, ensuring that we target benefits to those who need them the most. Otherwise, the programs may simply collapse under the weight of their own cost. Tax increases can’t save us — a Manhattan Institute analysis found that a 10% across-the-board income tax hike would barely pay for half of the 10-year Social Security and Medicare shortfall, and doubling taxes on Americans in the top two tax brackets would barely cover a quarter. It’s simple: the only way to rein in long-term federal deficits is to restructure our entitlement programs and target benefits to the neediest seniors.

But in the debt ceiling fight, Republicans and Democrats agree on one thing: they are not going to touch Medicare or Social Security. The math is clear, but so are the political incentives — voters are willing to punish anyone looking to alter their benefits.

So, what does each party want? Republicans want spending cuts. They are looking to reclaim their position as the party of fiscal responsibility, particularly after President Biden’s spending bonanza led to historic inflation throughout 2022. Beyond that, it’s murkier. In a concession to the hard-right members who resisted his bid for Speaker of the House, Kevin McCarthy pledged to cap federal spending at 2022 levels and balance the budget within 10 years. With cuts to Medicare and Social Security off the table, that means gutting nearly every other major federal program. Some House Republicans have shown openness towards a plan put together by former Trump Budget Director Russ Vought which does just that. But it’s hard to imagine such a bill passing, even in the GOP-led House. More moderate Republicans won’t vote for it, and McCarthy probably wouldn’t put it on the floor. We’ll have to wait to find out what Republicans really want out of the debt ceiling fight — there’s no reason for Republican leadership to show their cards now. As negotiations heat up, we’ll learn more about their priorities.

Democrats, meanwhile, are pushing for a “clean” debt ceiling increase — no strings attached. They are uninterested in any negotiation over curbing our spending habits. It’s not that Democrats deny we are heading toward a fiscal crisis — the math is too obvious to do that. When the day of reckoning comes, their answer will be simple: it’s time to raise taxes. And the tax hikes won’t be just for the rich: without action on spending, we’ll be forced to raise taxes on all Americans just to pay our bills.

Ultimately, the parties will meet somewhere in the middle. Joe Biden seems likely to agree to modest discretionary spending cuts as he moves towards the center in preparation for his 2024 re-election campaign. Compromise is a reality in a now-divided Washington, and Kevin McCarthy won’t open himself up to fire from the right by putting a clean debt limit increase on the floor. The nature of the deal is less certain — it could be the first step on the path towards fiscal sanity or a virtue signaling exercise heavy on bold proclamations about future savings and light on meaningful spending reform. It will be a tall task for Speaker McCarthy to hold his fractious conference together, and Democrats showed during the Speakership fight that they are content to stay together and watch him squirm. But it’s hard to imagine that Congress won’t pass a debt ceiling increase. The stakes are simply too high. The more interesting question: what will it take to get it done?