Stock market crash fears are elevated lately as Congress scrambles ahead of its upcoming debt ceiling decision.

On Monday morning, House Speaker Kevin McCarty gave a speech at the New York Stock Exchange, where he made clear his position on government spending in the face of a quickly climbing debt limit.

“It’s time that government got off its present spending spree before it squanders our future prosperity,” McCarthy said.

Like most Republicans, McCarthy will likely be forced to jump aboard legislation that raises the debt ceiling — but not without issuing some demands. McCarthy wants to cut spending back to the 2022 level while slowing the pace of future expenditures to just 1% growth annually through the next decade.

Democrats have responded that they’re still waiting on an “actual budget plan” from their Republican House colleagues and are open to negotiating.

As it stands, the government is currently operating past the statutory debt limit, which it surpassed in January. Since then, the Treasury Department has been taking advantage of its “extraordinary measures” powers to delay payments to certain government pension plans and using cash reserves to pay down certain payables.

Stock Market Crash Alarm Rings as Government Approaches Potential Default

A government default represents a worst-case outcome for the country as it operates past its debt limit. Indeed, Treasury Secretary Janet Yellen has stated the Treasury will likely exhaust its financial leverage early this summer. Although economists estimate a government default, referred to as “X-date” on Wall Street, wouldn’t happen until August.

The government’s path forward depends on Congress coming to a mutually acceptable debt limit extension. For Republicans, the emphasis here is on “mutually acceptable,” as the party will likely have some conditions it will attempt to push through in exchange for compliance with the debt limit-raising legislation.

Ralph Axel, rates strategist at Bank of America, remains unsure of the country’s path forward in the face of the growing debt crisis:

“..this would represent the first time in history that the U.S. would default on any of its obligations due to the debt-ceiling law.

We think [a default] would include a fall in equity and bond prices, potentially testing Treasury market functioning and liquidity.”

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.